Rental Value Growth Outpaces Capital Value Appreciation Since 2021: Report

As the debate on buy vs. rent rages on, the recent data analysis has shown that the rental values in key micro-markets of the top seven cities have gone up to a significant 72 per cent between 2021-end and the first half of 2024 (H1 2024). As per the Anarock Research data, in Bengaluru, Pune, Kolkata and Chennai, the average residential rentals rose more than the capital values during the stated period.

As per the report, Bengaluru’s Sarjapur Road saw an average monthly rentals increase by 67 per cent from Rs 21,000 at the end of 2021 to Rs 35,000 in the second quarter of the current year. On the other hand, the capital values rose 54 per cent.

Likewise, Pune’s Hinjewadi saw rental values appreciate by 52 per cent while capital values rose just 31 per cent. The trend continued in Kolkata’s EM Bypass where the rental value appreciation was 46 per cent, while capital values growth was just 15 per cent.

“Data analysis of key micro-markets in the top 7 cities shows that in cities like Bengaluru, Pune, Kolkata and Chennai, average residential rental values rose more than the capital values between 2021-end to H1 2024. However, areas in NCR, MMR and Hyderabad saw the reverse trend – capital values appreciated more than the rental values. Such data can be a key parameter - though by no means the only one - used to determine whether it is more advantageous to buy a property or opt for renting,” stated Prashant Thakur, Regional Director and Head, Research - Anarock Group.

Contrary to the trend, Key micro-markets in the national capital region (NCR), MMR and Hyderabad saw capital values appreciate more than rental values during the period. NCR’s Sohna Road saw rental values go up by 40 per cent while capital values jumped 54 per cent; Hyderabad’s Hitech City and Gachibowli also saw capital value growth outpace that of rental values.