Capital values in key micro markets of the top 7 cities have grown by 128 per cent between 2021-end and 2024-end, while rental values in many micro markets have appreciated less than the overall capital value growth, according to the latest ANAROCK data.
Anuj Puri, Chairman of ANAROCK Group, said, "An analysis of the key micro markets in the top 7 cities shows that in major cities like Bengaluru, MMR, NCR and Hyderabad, average capital values rose higher than rental values between 2021-end and 2024-end." "On the other hand, localities in Pune, Kolkata and Chennai saw the reverse trend, rental values appreciated more than the capital values."
Between 2021 and 2024, several markets saw capital value growth, significantly outpacing rental value growth. In NCR, Sohna Road experienced a 59 per cent rise in capital values compared to a 47 per cent increase in rental values, while Sector-150 in Noida saw capital values surge by 128 per cent, outpacing rental growth of 66 per cent. In Mumbai, Chembur saw capital values grow by 48 per cent, compared to a 42 per cent rise in rental values, and in Mulund, capital prices increased by 43 per cent, while rentals rose just 29 per cent. Hyderabad's HITECH City and Gachibowli also mirrored this trend, with capital appreciation outpacing rental growth, capital values rose 62 per cent in HITECH City and 78 per cent in Gachibowli, while rentals grew 54 per cent and 62 per cent, respectively. Conversely, in Bengaluru, Thanisandra Main Road saw a 67 per cent rise in capital values versus a 62 per cent increase in rentals, whereas Sarjapur Road saw rental values rise more significantly by 76 per cent, compared to capital appreciation of 63 per cent.
On the other hand, key micro markets in Pune, Kolkata and Chennai saw higher rental value growth than the capital value appreciation between 2021-end to 2024-end. Pune, Kolkata, and Chennai experienced a notable trend where rental values grew faster than capital values in certain areas.
In Pune, Hinjewadi saw rental values increase by 57 per cent, while capital values rose by just 37 per cent. In Wagholi, rental values appreciated by 65 per cent, outpacing capital growth of 37 per cent. In Kolkata, EM Bypass recorded a 51 per cent rise in rental values, while capital values increased by only 19 per cent, and in Rajarhat, rental values grew by 37 per cent, compared to a 32 per cent rise in capital values. In Chennai, Pallavaram saw rental values increase by 44 per cent while capital values grew by just 21 per cent, and Perambur followed a similar pattern, with rental values rising by 36 per cent and capital values by 23 per cent.
The clear divergence between capital appreciation and rental growth in these areas indicates that homeownership is becoming more lucrative in key markets where property values are rising faster than rental yields. For investors, this suggests strong long-term returns in cities like Noida, Hyderabad, and MMR, where capital appreciation outpaces rental growth.
"More than ever, investors must align their strategy along very location-specific lines," said Anuj Puri. "Those looking for long-term capital appreciation can target high-appreciation markets, while rental-focused investors should zero in on localities where rents are rising steadily. It is extremely important for homebuyers to weigh property price trends against rental growth to understand if buying or renting makes more financial sense in each location."
