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Of Surging Supply and Lowering Rentals

Torbit - June 23, 2024 - - 0 |

With more supply hitting the markets in top 7 cities, over-heated housing rents are stabilizing. Latest ANAROCK data shows that average residential rental prices across key markets in these cities saw a 2-4 percent quarterly rise in Q2 2024 to date over the preceding quarter. Q1 2024 saw rents in these markets rise by between 4-9 percent quarterly against Q4 2023.

According to Santhosh Kumar, Vice Chairman, Anarock Group , the second quarter of most years typically sees rents increase more than in other quarters due to the commencement of the new academic year and the employment of new staff. This year, declining rental value growth coincides with substantial new housing supply entering these markets.

The top 7 cities are set to deliver approximately 5.31 lakh new units in 2024 while in 2023, these cities saw nearly 4.35 lakh units hit their markets. This denotes a 22 percent  annual supply increase this year if delivery schedules remain on track.

The average rents for a standard 1,000 sq.ft. 2 BHK in Bengaluru’s Whitefield rose by 4 percent – from INR 32,500/month in Q1 2024 to INR 35,000/month in Q2 2024 to date. In Q1 2024, the quarterly jump against Q4 2023 was double at 8 percent

  • Average rents in Noida’s Sector 150 rose by a mere 4 percent  – from approx. INR 24,000/month in Q1 2024 to approx. INR 25,000/month in the current quarter. The quarterly hike stood at 9 percent in Q1 2024 against Q4 2023. Sohna Road and Dwarka saw their respective quarterly rents increase by 3 percent  and 2 percent in Q2 2024; in Q1 2024, the hikes stood at 4 percent and 6 percent  respectively.
  • MMR’s key markets Chembur and Mulund saw avg. rents rise by just 2 percent against the preceding quarter (Q1 2024); in Q1 2024, they rose by over 4 percent against Q4 2023.
  • Hyderabad’s HITECH City and Gachibowli saw average rents rise by 3 percent each in Q2 2024 to date over the preceding quarter. In Q1 2024, the quarterly average rent hike in both these markets was 5 percent.

 

Cities Micro Markets 2023-end Q1 2024 Q2 2024
Bengaluru Sarjapur Rd 31,600 34,000 35,000
Whitefield 30,200 32,500 33,700
Hyderabad HITECH City 31,000 32,500 33,500
Gachibowli 30,500 32,000 33,000
Pune Hinjewadi 25,600 26,500 27,000
Wagholi 20,600 22,000 22,700
NCR Sohna Road 32,700 34,000 35,000
Sector-150 (Noida) 22,000 24,000 25,000
Dwarka 25,800 27,400 28,000
MMR Chembur 60,000 62,500 63,500
Mulund 46,500 48,500 49,700
Kolkata EM Bypass 25,600 27,000 27,800
Rajarhat 18,500 19,000 19,500
Chennai Perambur 20,200 21,000 21,600
Pallavaram 19,500 20,300 20,800

Source: ANAROCK Research

 City-wise Completions in 2024

Anarock data indicates that nearly 5,31,470 units are expected to be completed in 2024 across the top 7 cities, provided there are no delivery delays  In 2023, approxImately 4,35,045 units were completed in these cities.

Completed / To be Completed Units
Cities Year 2023 Year 2024 (EST)
Bangalore 52,565 51,685
Chennai 14,125 17,580
Hyderabad 20,500 34,770
Kolkata 25,075 25,220
MMR 1,43,500 1,60,900
NCR 1,14,280 1,44,315
Pune 65,000 97,000
Total 4,35,045 5,31,470

Source: ANAROCK Research

Among the top 7 cities, MMR is slated to see the highest completions at about 1,60,900 units in 2024. In 2023, the region saw nearly 1,43,500 units completed.

  • NCRis expected to see approx. 1,44,315 units delivered in 2024, against approx. 1,14,280 units in 2023.
  • Puneis expected to see approx. 97,000 units completed in 2024. In 2023, approx. 65,000 units were completed here.
  • Bengaluru, the key rental hub with the highest rental value hikes, will see approx. 51,685 units delivered in 2024, against approx. 52,565 units in 2023.
  • Hyderabadis slated to see approx. 34,770 units completed by  2024-end; in 2023, approx. 20,500 units were completed.
  • Kolkatais expected to see approx. 25,220 units delivered in 2024. In 2023, approx. 25,075 units were completed here.
  • Chennaiwill see the delivery of approx. 17,580 units in 2024, against 14,125 units in 2023.

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