India’s rental market continues to grow with average rents increasing 4.9% QoQ: Magicbricks.
Magicbricks, India’s leading real estate platform, released its flagship Rental Index for April-June 2023, observing that the rental demand across 13 major cities in India increased 18.1% QoQ , supply increased 9.6% QoQ while rents increased 4.9% QoQ.
Based on the behavior and preferences of over 2 crore customers on Magicbricks platform, the report also observed that notable cities such as Bengaluru (8.1%), Navi Mumbai (7.3%), and Gurugram (5.1%) displayed the highest increment in average rents QoQ. Conversely, Delhi (- 0.9%) and Mumbai (-0.1%) witnessed marginal decline in rents QoQ.
Sudhir Pai, the CEO, Magicbricks, commented, “Over the past year, rental housing demand surged in major Indian cities, driven by returning employees and students. Return to office culture boosted the need for workplace-proximate housing while educational institutions resumed in-person activities, drawing students back to city centers. Meanwhile, as property values soared, homeowners seized opportunities for profitable property sales over rentals, reducing supply. This, coupled with high demand, notably hiked rents across prominent Indian cities.”
As per the Magicbricks Report, the popularity of 2 BHK units remains unchallenged, commanding a significant 53% share in both demand and supply, followed by 1 BHK (27%) and 3 BHK (18%). The demand for 3 BHK units declined from 36% in Q1 2023 to 18% in Q2 2023, while the demand for 1 BHK units increased from 17% in Q1 2023 to 27% in the present quarter. This shift highlights a growing inclination toward compact apartments.
The report concludes that beyond the factor of proximity to employment hubs, a significant driving force for demand this quarter is affordability. Rental accommodations with a monthly rent within INR 10,000 to 20,000 emerged as the favored choice among tenants. These preferences were predominantly observed within unit dimensions spanning from 500 to 1,000 square feet of covered area.