Rental price rise in Q2 of 2024 drops to 3 percent in Hyderabad

The once-booming rental markets in India's top cities are now showing signs of stabilization due to a surge in housing supply.

Hyderabad: Hyderabad’s rental market, particularly in Hitec City and Gachibowli, saw an average rent rise of 3 per cent in the second quarter (Q2) of 2024, down from 5 per cent recorded in the Q1.

The once-booming rental markets in India’s top cities are now showing signs of stabilization due to a surge in housing supply. According to the latest Anarock data, average residential rental prices across the key markets in the cities saw a 2 per cent to 4 per cent quarterly increase in Q2 2024, a notable drop as against 4 per cent to 9 per cent quarterly hike observed in Q1 2024.

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Hyderabad, a major focus of this trend, exemplifies this shift. In Q2 2024, the average rents in Hyderabad’s Hitec City and Gachibowli rose by just 3 per cent. This rise falls sort of the 5 per cent increase that these areas witnessed in the previous quarter. The city is set to see around 34,770 units completed by the end of 2024, significantly up from the 20,500 units completed in 2023, Anarock report said.

Santhosh Kumar, Vice Chairman of Anarock Group, said, “In India, the second quarter typically sees higher rent increases due to the new academic year and employment trends. This year, declining rental value growth coincides with substantial new housing supply entering these markets.”

The top seven cities are expected to deliver approximately 5,31,000 new units in 2024, a 22 per cent increase from the 4,35,000 units completed in 2023.

Other major cities also reflect this trend. In Noida’s Sector 150, average rents rose by 4 per cent in Q2 2024, compared to a 9 per cent rise in Q1 2024. Mumbai’s key markets of Chembur and Mulund experienced a 2 per cent rise in Q2 2024, down from over 4 per cent in Q1 2024.

Overall, the increase in housing supply is evident across the top cities. MMR is set to lead with approximately 1,60,900 units completed in 2024, up from 1,43,500 in 2023. Bengaluru, despite being a rental hotspot, will witness a slight decrease with 51,685 units in 2024, down from 52,565 in 2023. Kolkata and Chennai will see moderate increases in completions, Anarock said in its report.

This surge in supply is playing a crucial role in moderating rental prices, providing much-needed relief to renters across these metropolitan areas.