Residential rental markets across the top 7 cities have made a strong comeback after offices and schools reopened in 2022. Analysis of the average monthly rental trends across the leading luxury localities in the top 7 cities reveals that most markets have seen double-digit growth in the last two years, with only a few exceptions.
As per the latest ANAROCK data, the average monthly rentals in the prominent luxury micro-markets across the top 7 cities increased anywhere between 8-18% in the last two years. Mumbai’s Worli saw the highest rental growth of 18% in the period – from Rs 2 lakh per month in 2020 to Rs 2.35 lakh in 2022 for luxury homes of a minimum 2,000 sq. ft. area. This was followed by Bengaluru’s Rajaji Nagar, which witnessed a 16% jump in the same period – from Rs 56,000 in 2020 to Rs 65,000 in 2022.
ANAROCK Group Chairman Anuj Puri said, “Residential rental demand skyrocketed across the top cities in 2022 with schools reopening classrooms and most companies calling employees back to offices. Pent-up rental demand hitting the market has caused a demand-supply mismatch in many areas, resulting in monthly rental hikes. Also, post-Covid tenant preference has tilted towards large-size homes.”
"Most prominent luxury housing markets witnessed double-digit growth in rentals in the last two years," says Puri. "Pre-Covid, average 2-year luxury rental increases at a given time were largely single-digit, between 5-7%.,‘’ added.
Meanwhile, capital appreciation in these luxury markets remained in the single digits (between 2-9%) in the last two years. Bengaluru’s Rajaji Nagar witnessed the highest capital appreciation of 9%, with average prices increasing from Rs 5,698 per sq. ft. in 2020 to Rs 6,200 per sq. ft. in 2022.
Top Luxury Hotspots – Rental vs Capital Price Changes
The luxury residential market has been on an upswing post the pandemic, with its overall sales share growing to about 14% in H1 2022. Even demand for rental luxury properties is on a high, resulting in growth in average monthly rentals.