Luxury Housing Rentals Growing At Up To Twice The Pre-Covid Pace: Anarock
The average monthly rentals in India’s luxury micro markets across top seven cities grew 8-18% in the last two years, says Anarock
India's luxury housing rentals are growing at up to twice the pre-pandemic pace as Covid-related health concerns and work from home drove demand for bigger homes.
The average monthly rental of the country's leading luxury micro markets across the top seven cities grew between 8% and 18% in the last two years, according to Anarock Property Consultants. The average two-year luxury growth before the coronavirus was between 5% and 7%, it said.
"Residential rental demand skyrocketed across the top cities in 2022, with schools reopening classrooms and most companies calling employees back to offices," Anuj Puri, chairman of Anarock Group, said in a note.
India’s luxury residential market saw overall sales share grow to about 14% in the first half of 2022, with growth in average monthly rentals, the real estate services company said.
The coronavirus outbreak has accentuated the need for bigger spaces amid health concerns and working-from-home trends, the note said. As caseloads started to taper off in 2022 after a third wave, schools started reopening and most businesses resumed working from offices.
In the aftermath of the coronavirus pandemic, it can be observed that tenants are preferring large-sized homes, Puri said. Pent-up rental demand in the housing market has caused a demand-supply mismatch, thus lifting monthly rentals, he added.
However, capital appreciation, which is the difference between purchasing price and selling price of an asset, in these luxury markets remained in the single digits, between 2% and 9%.
Bengaluru's Rajaji Nagar saw the highest capital appreciation of 9%, while Worli in MMR saw the lowest.
Luxury properties in the top seven cities that performed well in 2022 and may see further short-to-mid term boosts are:
Bengaluru: JP Nagar, Rajaji Nagar.
Average monthly rentals in JP Nagar appreciated by 13% in 2022 from a year ago, while capital prices rose by 9%. In Rajaji Nagar, rental rose by 16% and capital prices by 5%.
Chennai: Anna Nagar, Kotturpuram.
The luxury rental prices in Anna Nagar have risen 13% in the last two years, while capital prices have increased by 5%. In Kotturpuram, the average monthly rental rose by 14% while capital prices rose by 4%.
Hyderabad: Jubilee Hills, HITEC City.
Jubilee Hills saw average monthly rentals appreciate by 15% in 2022 over 2020, while capital prices rose 6%. HITEC City saw a rental price rise of 11%, while capital prices increased by 7%.
Kolkata: Alipore, Ballygunge.
The rental prices of luxury homes in Alipore gained 8% in 2022 compared to 2020, while capital prices increased by 4%. In Ballygunge, the average monthly rental rose by 10% while capital prices rose by 3%.
Mumbai Metropolitan Area: Tardeo, Worli.
Rentals in Tardeo rose 15% in 2022 over 2020, while the capital prices increased by only 3%. In Worli, the average monthly rentals for a minimum 2,000 sq. ft. area home increased by 18%, while capital prices saw a 2% jump.
National Capital Region: Golf Course Ext. Rd, Golf Course Rd.
Rentals along Golf Course Road rose by 11%, while capital prices saw a 3% rise. Meanwhile, Golf Course Extension Road saw rentals increase by 12% and capital prices by 5% in 2022 from a year ago.
Pune: Koregaon Park, Prabhat Road.
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%.