The evolving housing preferences across the nation, driven by favorable macroeconomic conditions, including declining youth unemployment [from 17.8% in 2018 to 10.2% in 2024] and elevated property prices has encouraged renting as a practical alternative to homeownership.
It is evidenced by a 3% quarter-on-quarter (QoQ) increase in both demand and supply, alongside a substantial 4.8% QoQ and 29.6% year-on-year (YoY) rise in rental rates, as per Magicbricks,
The rental segment continues to assert its relevance, with increasing reliance on leased housing options nationwide. This positive trend is significantly influenced by improved labor mobility and urban migration, particularly boosting demand for rental accommodation in key Indian cities.
Greater Noida experienced a significant surge in rental demand with a 20.7% QoQ increase, followed closely by Delhi (+17.2% QoQ) and Ahmedabad (+12.2% QoQ), indicating a strategic shift from ownership to occupancy in cities with strong rental traction.
The supply of rental homes across India increased considerably, with Greater Noida (+12.6%) and Chennai (+11.4%) leading QoQ supply growth, and Mumbai (+23.4%), Navi Mumbai (+22.7%), and Noida (+22.3%) showing a sharp increase in rental listings YoY.
Rental rates saw substantial escalations in Navi Mumbai (+19.4%), Kolkata (+13.7%), Hyderabad (+11.5%), and Chennai (+11.2%), contributing to an overall robust rise in rents across India.
There was a notable surge in demand for compact 1 BHK units, especially in Navi Mumbai (27% QoQ), Gurugram (23% QoQ), Pune (19% QoQ), and Noida (18% QoQ), while demand for larger 3 BHK homes declined in cities like Gurugram (-25% QoQ), Delhi (-24% QoQ), Ahmedabad (-21%), and Noida (-21%), particularly in Delhi-NCR, reflecting a clear downsizing trend.
Nationally, 2 BHK units remained the most sought-after (46% share), and semi-furnished units continued to dominate the rental market (52% of demand, 53% of supply).
Homes ranging from 500 to 1,500 sq. ft. attracted the majority of tenant interest (76%). The INR 10,000-20,000 per month range led rental demand nationally (36% share), with Mumbai continuing to be the most expensive rental market, while Greater Noida, Ahmedabad, and Noida offered more budget-friendly options.
The highest quarterly gross rental yield of 4.1% was observed in Ahmedabad, Chennai, Hyderabad, and Navi Mumbai.
The patterns clearly indicate a transforming market where demand and supply are rising in tandem with increasing rents. While the supply of rental homes is gradually expanding, Magicbricks anticipates a more moderate pace of rent hikes in the medium term with emphasis on compact homes, flexible budgets, and rental-first strategies.
