Top Luxury Housing Markets See Up To 18% Rental Growth in Last 2 Years

 

  • Among localities in top 7 cities, Mumbai’s Worli saw highest rental growth (18%); avg. rentals (for a min. 2,000 sq. ft. home) increased from INR 2 lakh in 2020 to INR 2.35 lakh in 2022
  • Bengaluru’s Rajajinagar saw a 16% jump in the same period – from INR 56,000 in 2020 to INR 65,000 in 2022
  • Most top luxury markets saw double-digit growth in rentals in the last two years; pre-Covid, the avg. 2-year luxury rental hikes were single-digit
  • Capital appreciation in these luxury markets remained in single digits (2-9%) in last 2 years; Bengaluru’s Rajaji Nagar saw highest capital appreciation of 9% with avg. prices – from INR 5,698 per sq. ft. to INR 6,200 per sq. ft.

 

Residential rental markets across the top 7 cities have made a strong comeback after offices and schools reopened in 2022. Analysis of the average monthly rental trends across the leading luxury localities in the top 7 cities reveals that most markets have saw double-digit growth in the last two years, with only a few exceptions.

 

As per latest ANAROCK data, the average monthly rentals in the prominent luxury micro-markets across the top 7 cities increased anywhere between 8-18% in the last two years. Mumbai’s Worli saw the highest rental growth of 18% in the period – from INR 2 lakh per month in 2020 to INR 2.35 lakh in 2022 for luxury homes of minimum 2,000 sq. ft. area.

 

This was followed by Bengaluru’s Rajaji Nagar, which witnessed a 16% jump in the same period – from INR 56,000 in 2020 to INR 65,000 in 2022.

 

Anuj Puri, Chairman – ANAROCK Group, says, “Residential rental demand skyrocketed across the top cities in 2022 with schools reopening classrooms and most companies calling employees back to offices. Pent-up rental demand hitting the market has caused a demand-supply mismatch in many areas, resulting in monthly rental hikes. Also, post-Covid tenant preference has tilted towards large-size homes.”

 

“Most prominent luxury housing markets witnessed double-digit growth in rentals in the last two years,” says Puri. “Pre-Covid, average 2-year luxury rental increases at a given time were largely single-digit, between 5-7%.”

 

 

Avg. Monthly Rentals: Top Luxury Markets (For 2,000 sq. ft. area)

City

Micro Market

2020 (INR)

2022 (INR)

% Appreciation (2020 vs 2022)

Bangalore

JP Nagar

46,000

52,000

13%

Rajaji Nagar

56,000

65,000

16%

Chennai

Anna Nagar

56,000

63,000

13%

Kotturpuram

74,000

84,000

14%

Hyderabad

Jubilee Hills

54,000

62,000

15%

HiTech City

53,000

59,000

11%

Kolkata

Alipore

60,000

65,000

8%

Ballygunge

88,000

97,000

10%

MMR

Tardeo

2,70,000

3,10,000

15%

Worli

2,00,000

2,35,000

18%

NCR

Golf Course Ext. Rd

50,000

56,000

12%

Golf Course Rd

70,000

78,000

11%

Pune

Koregaon Park

59,500

68,000

14%

Prabhat Road

64,000

69,000

8%

Source: ANAROCK Research

 

Capital Appreciation

 

Meanwhile, capital appreciation in these luxury markets remained in single digits (between 2-9%) in the last two years. Bengaluru’s Rajaji Nagar witnessed the highest capital appreciation of 9%, with average prices increasing from INR 5,698 per sq. ft. in 2020 to INR 6,200 per sq. ft. in 2022.

 

Top Luxury Hotspots – Rental vs Capital Price Changes

 

The luxury residential market has been on an upswing post the pandemic, with its overall sales share growing to about 14% in H1 2022. Even demand for rental luxury properties is on a high, resulting in growth in average monthly rentals.

 

Some of the prominent luxury markets in the top 7 cities that performed well in 2022 and may see further short to mid-term boosts:

 

 

Avg. Capital Prices: Top Luxury Markets

City

Micro Markets

2020 (INR/sft.)

2022 (INR/sft.)

% Appreciation (2020 vs 2022)

Bangalore

JP Nagar

5,698

6,200

9%

Bangalore

Rajaji Nagar

13,300

13,900

5%

Chennai

Anna Nagar

11,300

11,850

5%

Chennai

Kotturpuram

13,500

14,000

4%

Hyderabad

Jubilee Hills

6,950

7,400

6%

Hyderabad

HiTech City

5,675

6,100

7%

Kolkata

Alipore

13,000

13,500

4%

Kolkata

Ballygunge

11,350

11,700

3%

MMR

Tardeo

41,862

43,000

3%

MMR

Worli

38,560

39,350

2%

NCR

Golf Course Ext. Rd

8,300

8,700

5%

NCR

Golf Course Rd

13,150

13,500

3%

Pune

Koregaon Park

11,128

11,600

4%

Pune

Prabhat Road

12,500

12,900

3%

Source: ANAROCK Research

 

  • Bengaluru – the luxury residential hotspot JP Nagar saw avg. monthly rentals appreciate by 13% in 2022 over 2020, while capital prices in this period rose by 9%. Likewise, Rajajinagar saw rental prices rise by 16%, and capital prices by 5%.
  • MMR – luxury rentals in Tardeo rose 15% in this period, while capital prices increased by only 3%. Similarly, in Worli, the average monthly rentals for a minimum 2,000 sq. ft. area home increased by 18%, while capital prices saw a mere 2% jump.
  • NCR – rentals in luxury hotspot Golf Course Road increased by 11%, while capital prices saw a mere 3% rise. Likewise, Golf Course Extension Road saw rentals increase by 12% and capital prices by 5% in this period. 
  • Chennai – luxury rentals in Anna Nagar rose 13% in this period, while capital prices increased by 5%. Similarly, in Kotturpuram, the average monthly rentals rose by 14% while capital prices rose by 4%.
  • Hyderabad – the luxury residential hotspot Jubilee Hills saw avg. monthly rentals appreciate by 15% in 2022 over 2020, while capital prices in this period rose 6%. HITECH City saw a rental price rise of 11%, while capital prices increased by 7%.
  • Pune – the rentals in Koregaon Park rose 14% in this period, while capital prices increased by 4%. In Prabhat Road, the average monthly rentals rose by 8% while capital prices rose by just 3%.
  • Kolkata – luxury home rentals in Alipore rose 8% in 2022 against 2020, while capital prices increased by 4%. Similarly, in Ballygunge, the average monthly rentals rose 10% while capital prices rose by 3%.

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