As more Indians commute to cities, the controversy over purchasing vs renting homes has reappeared. While both choices have advantages, new statistics from Anarock, a property consulting business, reveal a substantial trend of rental value appreciation surpassing capital value increase in numerous important regions.
ANAROCK Research examined data from the top seven cities and discovered that rental values in particular micromarkets rose by up to 72% between late 2021 and the first half of 2024. The increase in rental values reflects the increased demand for rental units in these locations.
Key Findings
On Bengaluru's Sarjapur Road, average monthly rental prices climbed by 67%, while capital values increased by 54%. Average rental prices jumped 56% on Thannisandra Main Road, while capital values increased 52%.
Rental prices in Pune's Hinjewadi increased by 52%, while capital values grew just 31%. Wagholi's rental values increased by 60%, but capital values increased by just 30%.
In Kolkata's EM Bypass, rental prices increased by 46% while capital values increased by only 15%. Rajarhat had 30% rental value rise and 23% capital appreciation.
Pallavaram in Chennai had a 40% increase in rental prices, while capital values grew by 18%. Perambur saw 33% rental value rise and 18% capital appreciation.
Average monthly rental growth
On Bengaluru's Sarjapur Road, average monthly rental prices climbed by 67%, while capital values increased by 54%. Average rental prices jumped 56% on Thannisandra Main Road, while capital values increased 52%.
Rental prices in Pune's Hinjewadi increased by 52%, while capital values grew just 31%. Wagholi's rental values increased by 60%, but capital values increased by just 30%.
In Kolkata's EM Bypass, rental prices increased by 46% while capital values increased by only 15%. Rajarhat had 30% rental value rise and 23% capital appreciation.
Pallavaram in Chennai had a 40% increase in rental prices, while capital values grew by 18%. Perambur saw 33% rental value rise and 18% capital appreciation.
Top markets where capital value appreciation surpassed rental value appreciation from 2021 to the end of H1 2024.
This trend was observed in key micro-markets in Delhi-NCR, Mumbai, and Hyderabad. For example, rental values on NCR's Sohna Road increased by 40% throughout the period, while capital values increased by 54%. Similarly, Sector-150 in Noida had a 56% increase in rental value, while capital prices increased by a staggering 126%.
MMR Chembur saw 38% rental increase and 39% capital appreciation. In Mulund, rental values increased by 26%, while capital prices increased by 36%.
Capital appreciation outpaced rental values in HITECH City and Gachibowli, both in Hyderabad. Rental values in HITECH City increased by 46%, while capital values in Gachibowli increased by 70%.
"Data study on significant micro-markets in the top seven cities reveals that in places like Bengaluru, Pune, Kolkata, and Chennai, average residential rental prices increased more than capital values between the end of 2021 and the first half of 2024. However, places such as NCR, MMR, and Hyderabad saw the opposite trend, with capital prices increasing faster than rental values. Dr. Prashant Thakur, Regional Director & Head, Research - ANAROCK Group, stated that such data can be an important component, albeit not the only one, in determining whether it is more profitable to buy or rent property."
Not everyone who moves to a city for a career plans to stay there permanently. Others may be lured to the city's urban culture and decide to make it their home, while others may see value in investing in real estate regardless of whether they intend to live there or not.
Other elements that influence such a decision include financial resources, work possibilities, stage of life, family size, and personal preferences.
