Homebuying may soar as gross rental yield climbs to 3.62 pc: Magicbricks report

New Delhi [India], November 22 : The Indian rental market is experiencing a significant uptick, with the average gross rental yield across 13 key cities hitting an impressive 3.62 per cent, according to Magicbricks report.
This marks a significant shift in the real estate landscape, with rental yields seeing substantial growth, particularly in cities like Chennai and Delhi, which have outperformed the national average.
Chennai has reported a remarkable 21.3 per cent quarter-on-quarter (QoQ) increase in rental yields, while Delhi saw a more modest but still notable 8.8 per cent rise.
These figures indicate growing confidence in the Indian rental market, with investors increasingly attracted to residential properties as a source of better returns.
Prasun Kumar, Chief Marketing Officer of Magicbricks, said, "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."
Interestingly, the highest rental yields are emerging in cities that have traditionally not been viewed as prime investment destinations.
Ahmedabad, Hyderabad, Kolkata, and Pune are seeing strong rental growth, surpassing even established hubs like Bengaluru and Delhi.
Ahmedabad stands at the top of the list with a rental yield of 3.9 per cent. The city has seen a 16.9 per cent year-on-year (YoY) increase in average monthly rent, now reaching Rs 19.35 per square foot (psf).
Property prices in Ahmedabad average Rs 5,927 psf. The combination of affordable property rates and strong rental demand has made Ahmedabad an attractive destination for investors looking for robust rental returns.
Hyderabad, another rising star, saw its rental yield increase from 3.5 per cent in Q2 2024 to 3.7 per cent in Q3 2024.
Average monthly rents in the city surged by 28.2 per cent YoY to Rs 25.17 psf, while property prices grew by a more modest 6.2 per cent YoY to Rs 8,188 psf.
Hyderabad's growth is being fuelled by an influx of tenants, driven by increasing job opportunities in the city's growing tech and business sectors.
Similarly, Kolkata offers a balanced market dynamic, with a rental yield of 3.7 per cent. The city's average rent rose by 12.9 per cent YoY to Rs 22.14 psf, with property prices growing steadily. Kolkata's appeal lies in its affordable living options and expanding job market, attracting both investors and tenants alike.
For investors, the current market conditions present an excellent opportunity to capitalize on both rental income and property appreciation.