Magicbricks, a prominent real estate platform, has unveiled its much-anticipated Rental Index for the period of April to June 2023, shedding light on substantial alterations in the rental landscape across 13 key cities in India. The report highlights a remarkable quarter-on-quarter (QoQ) escalation of 18.1% in rental demand, coupled with a 9.6% QoQ surge in supply. Simultaneously, rents experienced a moderate year-on-year (YoY) uptick of 4.9%.
Drawing insights from the preferences and behaviours of an extensive user base of over 2 crore customers on the Magicbricks platform, the report underscores noteworthy developments in specific cities. Notable metros such as Bengaluru (8.1%), Navi Mumbai (7.3%), and Gurugram (5.1%) have registered the highest increments in average rents on a QoQ basis. In contrast, Delhi (-0.9%) and Mumbai (-0.1%) observed a marginal QoQ decline in rents during the same period.
Sudhir Pai, CEO of Magicbricks, provides illuminating commentary on the dynamic trends, noting, “In the past year, there has been a notable surge in rental housing demand across major Indian cities. This trend has been primarily fueled by the return of employees and students to urban centres. The resurgence of the office culture has amplified the need for proximate housing options, while educational institutions resuming in-person activities have drawn students back to city cores. Simultaneously, escalating property values have prompted homeowners to capitalise on profitable property sales, resulting in a reduction in the supply of rental units. This combination of heightened demand and diminished supply has significantly contributed to the notable increase in rents across prominent Indian cities.”
Delving further into the Magicbricks Report, the enduring popularity of 2 BHK units remains evident, maintaining a commanding share of 53% in both demand and supply. This is followed by 1 BHK units (27%) and 3 BHK units (18%). Notably, the demand for 3 BHK units has declined from 36% in Q1 2023 to 18% in Q2 2023, while the demand for 1 BHK units has risen from 17% in the first quarter of the year to 27% in the current quarter. This pronounced shift underscores a growing preference for more compact apartment options.
The report’s conclusion emphasises that while proximity to employment hubs remains a crucial factor driving demand, affordability has emerged as a significant catalyst during this quarter. Rental properties falling within the monthly rent range of Rs 10,000 to 20,000 have emerged as the favoured choice among tenants. Interestingly, these preferences were predominantly observed for units ranging from 500 to 1,000 square feet in covered areas.