Demand-supply mismatch pushes home rents across India by 13.5% in 2022: Magicbricks

• Pan-India, average rents increased 7% in the October to December quarter, QoQ.
  
  
• The rental housing demand increased 8.5% and the supply decreased 17% in 2022
  
  
• There was a higher renting activity initially in 2022 as migrant workforce returned to their work locations.
  

The average home rents went up by 13.5% in 2022 as offices opened up and migrant workers returned to their places of work, says a Magicbricks report.

Rental housing demand increased 8.5% and the supply decreased 17% last year. When there is high demand and less supply, rents go up.

“The pan-India average rent continued to inch up in 2022, displaying improved strength of the rental housing market in the country,” the report said.

For October-December 2022, pan-India average rents increased 7% QoQ while rental demand decreased 18.1% QoQ says Magicbricks Rental Index.

The report observed that in 13 major cities, there was a higher renting activity in the initial quarters of 2022 as migrant workforce returned to their work locations, exhausting the existing inventory. The Covid-19 pandemic had led to thousands of migrant workers leaving their cities to go back to their own cities, towns and villages as jobs had dried up.

The increase in rent was 12.6% in Gurgaon, 9% in Noida, 8% in Hyderabad in the December ending quarter as compared to the earlier quarter. At the lower end, rents went up by 1.6% in Chennai, and remained flat in Kolkata and Delhi at 0.8% and 0.6%, respectively.

The report also observed that NCR registered the maximum dip (26.6%) in rental demand, followed by Mumbai (13.9%), Kolkata (12.3%) and Chennai (6%). All cities tracked by Magicbricks observed a decline in availability of rental units, except Mumbai and Thane that witnessed a QoQ growth of 2.9% and 1.9%, respectively.

Greater Noida witnessed the maximum decline in availability (16.1%) while Ahmedabad observed the least decline (1.7%).

Sudhir Pai, CEO, Magicbricks, says, “The Indian rental housing market recovered steadily during the first two quarters of 2022, with rental demand peaking during those months. With the start of the new financial year, one can expect the rental demand to pick up again and increasing home-loan Ahmedabad observed the least decline (1.7%).rates and economic uncertainty may also encourage prospective homebuyers to defer their purchase decisions and opt for rental homes.”

Since last May the RBI has raised the repo rates six times which has meant that home loan interest rates have gone up from 7% to 9.5%.

“The current global economic scenario of rising interest rates that can temper buying demand, geo-political tensions and the increasing number of lay-offs in the global IT industry could potentially have a mixed impact on Indian real estate markets,” Pai said.

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