India’s rental housing market shows signs of growth

A recent study conducted by makaan.com showcase that 10 of 12 Tier-I cities in India witnessed landlords earning rental yields of over 3% in July 2018.

When compared to the rental yield in July 2017, the yield expansion was as high as 0.7% for Ahmedabad and) 0.4% in Chennai.

Tier-I cities included in the analysis are Ahmedabad, Bengaluru, Chennai, Delhi, Ghaziabad, Gurugram, Hyderabad, Kolkata, Noida, Pune, Faridabad and the Mumbai Metropolitan Region (MMR). Ankur Dhawan Chief Investment Officer, PropTiger.com said, “Though capital values of property have dropped across the country, rentals have increased. This has improved rental yields for landlords. There is also additional trend of managed rentals and co-living which is improving rental yields for landlords.”

Most localities in Chennai have also shown positive change in the last one year in rental yield. OMR, for example, witnessed the highest rental yield of 4.4% in Jul 2018, followed by properties along GST, at around 4%.

Bengaluru: A locality-wise analysis shows that while the average rental yield was around 4.2% in Bengaluru, it was higher in certain localities. In Brookfield, for example, rental yield was 4.9% in July. Properties along Sarjapur Road observed an expansion of 1.1% in rental yield as compared to July 2017.

While rental real estate markets in Ahmedabad, Bengaluru and Kolkata reported the highest rental yield of 4.2% each in July, Hyderabad followed closely at 4%. Ahmedabad registered the highest jump of 0.7% in annual rental yield during this period.