With six and five percent respective rise in the average rental values, YoY, Hyderabad and Ahmedabad have emerged as the most active and profitable rental markets across top Indian metros, uncovers 99acres Insite Report (Oct-Dec 2016).
Hyderabad and Ahmedabad have invariably been two of the most active markets, among the top eight metros, in the residential rental landscape. According to the recent Insite report by 99acres.com, the cities reported the maximum surge in average weighted rental rates between Oct-Dec 2016 and 2015. Both the cities are popular for price competitiveness and enjoy a political environment which favours and promotes commercial development. Burgeoning commercial uptake has resulted into a dynamic population movement, and thus, thriving rental markets.
Muted home buying sentiments have benefitted the rental markets across the country. Cities with higher ticket-sizes such as Mumbai and Delhi NCR, too, have witnessed positive price movement in the last one year. However, over-supply of cost-effective rental inventory at peripheral locations such as Navi Mumbai and Thane in Mumbai, and Noida and Greater Noida in Delhi NCR, has restricted price growth. Hyderabad and Ahmedabad, on the other hand, boast of limited unsold inventory. Moreover, majority of the existing stock is concentrated in the most popular regions largely driven by employment hubs situated nearby.
Commenting on Hyderabad’s market, Naveen Mypala, Executive Director, Aliens Group, says, “Hyderabad is one of the most active commercial markets across India. Favourable government policies, post the formation of Telangana, have attracted some big-ticket transactions in the commercial landscape. Some of the largest deals that the city cracked in the last one year were with IT giants such as Google, Deloitte, Accenture and Genpact. This has triggered massive demand for rented accommodations, especially, in areas close to the IT/ITeS hubs. Ironically, residential supply, too, is concentrated in the same pockets i.e. the western quadrant of the city.”
Localities which have emerged as the top-grossers in Hyderabad include Somajiguda, Madhapur, Nizampet, Attapur and Miyapur. The average weighted rental rates in the areas have appreciated to the tune of 10-15 percent, YoY. All these locales fall within a distance of 10-15 km from the IT hubs – Gachibowli and HITEC City.
Similarly, the rental landscape in Ahmedabad has been largely triggered by the burgeoning industrial sector. Development along the Delhi-Mumbai Industrial Corridor (DMIC), especially, in Dholera is the major growth catalyst. Experts anticipate growing housing demand as the project progresses in the subsequent quarters. The localities which garnered maximum appreciation in the rental rates between Oct-Dec 2016 and Oct-Dec 2015 include New CG Road, Motera, Gota, Vaishnodevi Circle and Science City. All these regions have stood strong to maintain their reputation of being the ‘affordable’ pockets of the city, offering 2BHK units at a monthly rent ranging between Rs 8,000 and Rs 10,000.
Other cities driven by commercial expansion such as Bangalore and Pune recorded limited growth in the rental market owing to piling stock in the prime residential locations. Though demand for rented homes received a thrust post demonetisation, oversupply kept ‘ask’ rates under pressure.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. 99acres does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.