The Indian rental market has seen a major increase in the average gross rental yield across major cities, a report compiled by Magicbricks revealed. The average rental returns in the country reached 3.62 per cent in 13 major cities, with Ahmedabad leading the list with the highest rental yield of 3.9 per cent, the survey revealed.
Magicbricks in the study said, “This impressive rental yield comes as a result of both strong demand and relatively affordable property prices compared to other major cities. The city’s rental market experienced a notable 7.9% increase in rents during the quarter, with average rents for a 2BHK apartment rising to Rs 21,100 in areas like Shela and Rs 23,200 in South Bopal,” reported Business Standard.
The study found that the average real estate prices in Ahmedabad touched Rs 5,927 per square foot, while the average rent in the city climbed almost 17 per cent to touch Rs 19.35 per square foot in comparison to a year ago period.
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Despite the surge in rents, the city remained as one of the most attractive markets for rental investors, due to high demand in prime localities such as Satellite and Prahlad Nagar. These neighbourhoods witnessed rents for a 3BHK climb to Rs 42,500 in Satellite and Rs 40,000 in Prahlad Nagar. This indicated the steady increase in rental income potential for investors.
Meanwhile, Chennai also reported a notable rise of 21.3 per cent in rental returns on a sequential basis, while Delhi clocked a decent hike of 8.8 per cent.
Hyderabad emerged as another lucrative opportunity for investors with rental yields climbing from 3.5 per cent in Q2 2024 to 3.7 per cent in Q3 2024. The metro reported a 28.2 per cent gain in average monthly rents to Rs 25.17 per square foot, while property prices managed a meagre climb of 6.2 per cent to Rs 8,188 per square foot on a year-on-year (YoY) basis.
Prasun Kumar, CMO, Magicbricks, noted, “For decades, homebuyers primarily sought properties for personal use or as a primary residence. However, today’s dynamic real estate market is shifting that trend, with residential investments offering better returns. Encouraged by rising rental yields, we expect many buyers to explore multiple property investments, even leveraging loans to do so.”
