Residential rental prices across India increased sharply through 2025. For many households, monthly rents rose faster than regular living costs. High property prices and costly home loans kept many people in rented homes, while steady migration to cities continued to push demand. As India moves into 2026, rental growth is expected to slow, although some locations may still see higher increases due to infrastructure and job-linked demand.
This article explains the rental increase seen in 2025, provides a detailed city-wise rental table, and outlines what tenants and property owners can expect in 2026.
Table of Contents
Residential Rental Prices Movement in 2025
India’s rental market recorded strong growth during 2025:
- Average residential rents rose about 29.6 percent year on year in Q2 2025
- Quarter-on-quarter growth in Q2 stood at around 4.8 percent
- In the first half of 2025, most major cities recorded rental growth between 7 and 9 percent
Certain localities within cities experienced higher increases, mainly in areas close to metro lines, offices, and fast-developing suburbs.
Key Reasons Behind the Rent Increase
High cost of home ownership
Property prices and home loan EMIs remained high through most of 2025. Many families postponed buying homes and continued renting, which kept demand firm.
Continued movement to cities
Employment opportunities in IT, services, education, and manufacturing attracted people to metro cities and nearby suburbs, adding pressure on rental housing.
Limited ready homes in select locations
In popular residential belts, the number of homes available for rent did not match demand, especially for well-maintained 2BHK units.
Infrastructure-led demand
New metro lines, road projects, and office clusters changed demand patterns quickly. Localities with better connectivity saw faster rent growth than city averages.
City-Wise Rental Snapshot 2025
The table below provides a detailed view of rental changes across major Indian cities in 2025, along with realistic rent ranges and expected trends for 2026.
| Navi Mumbai | 19.4 percent year on year | 6 to 8 percent | ₹35,000 to ₹50,000 | Nodes near business parks and transport hubs | Spillover demand from Mumbai and improved connectivity | 2 to 3 percent |
| Hyderabad | Around 11.5 percent in key quarters | 7 to 10 percent | ₹25,000 to ₹40,000 | West corridor locations such as Hafeezpet | Office demand and steady residential development | Up to 4.5 percent |
| Bengaluru | 7 to 9 percent on average, up to 12 percent in some areas | 5 to 7 percent | ₹30,000 to ₹45,000 | KR Puram and nearby micro-markets | Office-linked demand and metro influence | 3 to 4.1 percent |
| Mumbai | 4 to 19 percent depending on suburb | 5 to 8 percent | ₹60,000 to ₹1,00,000 | Navi Mumbai and parts of Andheri East | Strong demand and limited supply | 2 to 2.5 percent |
| Delhi NCR | Strong quarterly growth in select suburbs | 5 to 8 percent | ₹35,000 to ₹60,000 | Greater Noida and emerging corridors | Suburban demand and new housing uptake | 3 to 4 percent |
| Chennai | About 11.2 percent year on year | 5 to 7 percent | ₹20,000 to ₹35,000 | Office-linked corridors | Job-driven demand and limited mid-range supply | Around 3 percent |
| Kolkata | Around 13.7 percent year on year | 5 to 7 percent | ₹18,000 to ₹30,000 | Areas near business districts | Recovery in demand and preference for connectivity | Around 3 percent |
| National Average | 29.6 percent year on year in Q2 | 5 to 7 percent | ₹20,000 to ₹30,000 | Metro corridors and employment hubs | High homebuying costs and city migration | Around 3 percent or more in strong markets |
Micro-Market Trends Within Cities
Rental growth in 2025 was not uniform within cities. In many cases, a few localities recorded much higher increases than the city average.
- Delhi NCR suburbs such as Greater Noida saw sharp quarterly increases due to fast absorption of new housing
- Mumbai recorded wide differences across suburbs, depending on supply and access to workplaces
- Bengaluru showed moderate overall growth, but pockets near metro routes and tech corridors remained in demand
- Hyderabad’s western belt continued to attract tenants because homes, offices, and services are closely located
For tenants and investors, comparing localities rather than cities gives a clearer picture of actual rental conditions.
Rental Yield Trends in 2025
Rental yields improved in several cities during 2025. Locations such as Hyderabad and Bengaluru recorded yields between 3 and 4.1 percent, while Mumbai remained lower at around 2 to 2.5 percent due to higher property prices.
Stable or improving yields indicate that rent growth has been keeping pace with property values in many urban areas.
Rental Market Outlook for 2026
Most forecasts suggest that rental growth will slow in 2026:
- National rental growth is expected to remain between 5 and 7 percent
- Urban markets may see growth between 5 and 8 percent
- Select infrastructure-driven locations could still record increases of 10 to 13 percent
The expected moderation is linked to new housing supply entering the market and the possibility of lower interest rates, which may encourage some renters to consider buying homes.
Model Tenancy Act and Security Deposit Rules
The Model Tenancy Act of 2021 is being adopted more widely by states in 2026, although implementation varies.
Key provisions for residential rentals include:
- Security deposit limited to a maximum of two months’ rent
- Annual rent increases allowed with prior notice
- Rental agreements to be registered with the Rent Authority within the prescribed time
- Security deposit to be refunded after adjusting for damages or unpaid dues
In cities such as Bengaluru and Hyderabad, the two-month deposit rule is increasingly followed. In Mumbai and Delhi NCR, deposits of two to three months remain common but face greater scrutiny.
Points Tenants Should Keep in Mind in 2026
Tenants are advised to compare multiple nearby localities before finalising a home, check daily travel time to work, and ensure that rental agreements clearly mention deposit terms and rent increase conditions. Keeping payment records and a signed agreement helps avoid disputes later.
Guidance for Property Owners Listing Homes
Property owners can attract serious tenants by providing clear information on rent, deposit, maintenance charges, parking, and access to transport. Transparent terms and accurate pricing help reduce vacancy periods, especially on digital property platforms such as Openplot.
Conclusion
India’s residential rental market experienced strong growth through 2025, driven by high homeownership costs and steady urban demand. In 2026, rent increases are expected to slow but remain positive, with certain locations continuing to outperform due to infrastructure and employment growth.
Understanding city-level data, local trends, and rental rules can help both tenants and landlords make informed decisions in a stabilising rental market.