Chennai: With more supply hitting the top 7 cities' markets, overheated housing rents are stabilising, finds Anarock. However, absorption levels will sustain and help ward-off any oversupply risk, says India Ratings.
The average residential rental prices across key markets in these cities saw a 2-4 per cent quarterly rise in the ongoing Q2 2024 over the preceding quarter. Q1 2024 saw rents in these markets rise by between 4-9 per cent quarterly against Q4 2023.
“In India, the second quarter of most years typically sees rents increase more than in other quarters due to the commencement of the new academic year and the employment of new staff. This year, declining rental value growth coincides with substantial new housing supply entering these markets,” Santhosh Kumar, Vice Chairman, Anarock Group said.
Average rents for a standard 1,000 sq.ft. 2 BHK in Bengaluru’s Whitefield rose by 4 per cent in Q2 2024 to date. In Q1 2024, the quarterly jump against Q4 2023 was double at 8 per cent. Average rents in Noida’s Sector 150 rose by a mere 4 per cent in the current quarter. The quarterly hike stood at 9 per cent in Q1 2024 sequentially. Mumbai’s Chembur and Mulund saw 2 per cent rise against 4 per cent in Q1. Hyderabad’s Hitech City and Gachibowli saw 3 per cent rise over 5 per cent in Q1.
According to Anarock, the top 7 cities are set to deliver around 5.31 lakh new units in 2024 while in 2023, these cities saw 4.35 lakh units hit their markets - a 22 per cent annual supply increase.
However, India Ratings finds that the Tier-1 residential real estate inventory stock of the top eight cities is comfortable compared to historical levels. The high base of absorption should sustain and help ward-off any oversupply risk. As of March 2024, the finished inventory was at a moderate level with the finished inventory to absorption ratio at about 14 per cent compared to the historical band of 35 per cent.
