Bengaluru, MMR, NCR and Hyderabad see real estate capital values surpass rentals
Pune, Kolkata and Chennai witness the reverse trend – real estate rental values appreciated more than the capital values, a report has said
Average capital values in Bengaluru, MMR, NCR and Hyderabad rose higher than rental values between 2021-end and 2024-end while Pune, Kolkata and Chennai saw the reverse trend – rental values appreciated more than the capital values, an analysis shared real estate consultant Anarock showed.
Noida's Sector 150 has witnessed a 128% jump in housing prices in the past three years while rental values rose 66%. In Sector-150, Noida, the average capital values more than doubled to ₹13,000 from ₹5,700 per sq ft. Rentals grew from 16,000 to ₹26,600 per month.
Sohna Road in Gurugram saw capital values rising 59% while rental values increased 47%. The average capital values in Sohna Road rose to ₹10,500 per square feet in 2024-end from ₹6,600 per square feet at the end of 2021 calendar year. Rental values grew to ₹36,700 from ₹25,000 per month.
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Among the top 7 cities, Hyderabad, NCR and MMR saw average capital values rise more than rentals between 2021-end to 2024-end. In Bengaluru, Thanisandra Main Road saw capital values rise higher (67%) than rental values (62%); in Sarjapur Road, the average monthly rental values rose more (76%) than capital values (63%), it showed.
Hyderabad’s HITECH City and Gachibowli also saw capital values outpace rental values
MMR’s Chembur and Mulund saw higher growth in capital values (by 48% and 43%, respectively) compared to rental value growth (42% and 29% respectively), it said.
Rental values appreciated more in Pune, Kolkata and Chennai
However, key micro markets in Pune, Kolkata and Chennai saw rental values appreciate more than the capital values, the analysis showed.
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Pune’s Hinjewadi saw rental values appreciate by 57%, while capital values rose by just 37%. In Wagholi, rental value growth was 65% while capital values rose by just 37%.
In Kolkata’s EM Bypass, rental value appreciation was 51%, while capital values rose by just 19% in this period. In Rajarhat, rental values grew by 37% while capital appreciation was 32%.
Chennai’s Pallavaram recorded rental value growth of 44%, while capital values rose by 21%. in Perambur, rental values grew by 36% while capital values rose 23%.
“An analysis of the key micro markets in the top 7 cities shows that in major cities like Bengaluru, MMR, NCR and Hyderabad, average capital values rose higher than rental values between 2021-end and 2024-end,” says Anuj Puri, chairman – ANAROCK Group. “On the other hand, localities in Pune, Kolkata and Chennai saw the reverse trend – rental values appreciated more than the capital values.”
The clear divergence between capital appreciation and rental growth in these areas indicates that homeownership is becoming more lucrative in key markets where property values are rising faster than rental yields. For investors, this suggests strong long-term returns in cities like Noida, Hyderabad, and MMR, where capital appreciation outpaces rental growth.
“More than ever, investors must align their strategy along very location-specific lines,” says Anuj Puri. “Those looking for long-term capital appreciation can target markets with high appreciation, while rental-focused investors should zero in on localities where rents are rising steadily. For homebuyers, it is extremely important to weigh property price trends against rental growth to understand if buying or renting makes more financial sense in each location.”
