Introduction
India’s real estate market has been experiencing a boom in recent years, with a huge increase in demand. According to a recent industry report, real estate sales in India will reach $1 trillion by 2030, contributing 13% to the gross domestic product (GDP) by 2025. Urbanization, expansion of the middle class, and infrastructure development have contributed to this growth, foreign investment and government support.
Table of Contents
- Introduction
- Price to Rent Ratio.
- INDIA Real Estate About
- Post-Pandemic Rents Have Soared.
- Real Estate Boom
- Conclusion
The spectacular boom in India’s property market is also taking a toll on the rental landscape. In major Indian cities like Delhi-NCR, Mumbai, Hyderabad, Pune and Bengaluru, increasing demand for rental properties has led to a significant increase in average rents, which has ushered in a dynamic change in the housing sector.
Price to Rent Ratio.
The price-to-rent ratio serves as a barometer of rental yield. While cities like Bengaluru and Hyderabad have favorable ratios (25) and high rental yields (3.5-4.0 percent), Indian cities still lag behind global counterparts like New York, Dubai and Singapore, where the ratio is much lower, which translates to higher rents.
Multiple factors contribute to India’s low rental yields. High land costs, high interest rates (up to 8–9.5 percent for home loans), and a lack of market transparency hamper rental income growth. Globally, low interest rates (averaging 3–4 percent) increase rental returns. make investment more profitable.
The price-to-rent ratio is a measure of the relative affordability of renting and owning a property. It is calculated by dividing the median property price by the median annual rent. India’s price-to-rent ratio is 16.8, lower than the global average of 25.9. This suggests that renting property in India is more affordable than buying it.
However, it is important to note that the price-to-rent ratio varies widely across different regions and cities in India. For example, Mumbai has a price-to-rent ratio of 38.5, which is higher than the national average.
INDIA Real Estate About
- Indore, Madhya Pradesh: Real estate in Indore has seen a rebound of late. With careful planning by the city government, Indore offers the most affordable integrated townships in our country at simply unbeatable prices. The price-to-rent ratio in Indore is 12.52.
- Ahmedabad, Gujarat: The real estate market in Ahmedabad is relatively small compared to some other big cities, but living is not cheap. The price-rent ratio in Ahmedabad is 223.
- Jaipur, Rajasthan: Jaipur is an ideal place to own or rent property. Buying a house in Jaipur is more affordable than in other metros. The price-to-rent ratio in Jaipur is 20.81.
Post-Pandemic Rents Have Soared.
However, post-pandemic, in the face of limited housing supply and rising rental demand, monthly asking rents have increased by 25–30 percent compared to 2019’s pre-pandemic levels. The growth is not uniform. Hotspots near office districts in metros like Delhi NCR, Mumbai, Bengaluru, Hyderabad, and Pune have grown by over 30 percent.
Take the eastern suburbs of Bangalore, for example. Rents for a 2 BHK unit (approx. 1,500 sq ft) in areas like Whitefield and Sarjapur have increased from INR 30,000–35,000 to INR 50,000–55,000 in 2019. Similarly, the rent of Gurugram in the Delhi NCR belt has increased significantly. Rents in areas like Golf Course Extension and Southern Peripheral Road have increased by 55–60 percent since 2019.
Real Estate Boom
Location is very important in maximizing rental income from residential properties. CBDs and office districts in urban centers generate lucrative returns. Tier-2 cities offer investment opportunities with low entry costs. Regardless of locale, strategic locations and rental demand are key determinants of rental profitability.
We expect the upward trajectory of rents to continue for the next 2-3 years. A confluence of high demand and limited supply for ready-made properties, a 15-20 percent increase in property prices from 2019, points to sustained rental market growth.
As India’s property market continues its upward trajectory, navigating the evolving rental landscape may entail a shrewd investment decision guided by market dynamics and location-specific insights.
Conclusion
As we conclude your visit to Openplot.com, we want to express our gratitude for entrusting us with your real estate aspirations. The journey to finding or selling a home is a significant milestone, and we’re honored to be a part of yours. The real estate market in India is expected to reach Rs. 13,00,000 crore by 2023.
The boom in the Indian real estate market is driven by factors such as urbanization, middle-class expansion, infrastructure development, foreign investments, and government support.
The government has offered various incentives, including tax reductions. Your story begins with an open plot here, and we’re excited to be a part of it. Welcome to a world where your ideal investment is just a click away!
Also read: Top 3 Areas to Invest In Hyderabad.