Good news for tenants: Rents may stabilise in 2025 as new supply and infra improve connectivity to peripheral locations

Rental growth eased to 7–9% in the H1 2025 across major cities, according to NoBroker report. This marks a slowdown from sharp 12–24% YoY increases in 2021-2024

With housing supply steadily improving, India's residential rental market is beginning to stabilise after three years of sharp rental hikes across major metros. According to a report by NoBroker, rental inflation in the first half of 2025 has eased to 7–9% in most cities, a significant drop from the 12–24% annual increases seen between 2021 and 2024.

With housing supply steadily improving, India's residential rental market is beginning to stabilise after three years of sharp rental hikes across major metros, a NoBroker report said. (Representational Image) (Unsplash )

Additionally, infrastructure upgrades, particularly metro expansions, are expected to improve connectivity and enhance quality of life by boosting demand, supporting rental appreciation, and driving long-term property value, the report said.

The correction comes as new housing supply gradually enters the market, easing the demand-supply gap that had driven rents to unsustainable levels, NoBroker said.

Rental inflation refers to the rising costs of renting an apartment.

"Our analysis for H1 2025 reveals a moderation in rental inflation, with rates settling between 7-9% across major metropolitan areas including Bangalore, Chennai, Delhi-NCR, Hyderabad, Mumbai and Pune. This marks a notable shift from the preceding years, which witnessed more aggressive increases between 12% and 24%. This easing of rental pressure is a positive development for tenants," Saurabh Garg, co-founder and chief business officer, NoBroker.com, said.

Despite cooling inflation, rental costs remain high, outpacing wages and squeezing household budgets

From 2020 to 2024, rents in major Indian cities went up by 35% to 80%, with yearly increases between 12% and 35% depending on the area. In 2025, although overall inflation (CPI) dropped to around 3%, rent inflation is still high at 7% to 9% in six major cities, data from NoBroker showed.

"This rise in rent has been much faster than both regular inflation (5%–7%) and wage growth (around 7%). While prices of everyday goods stayed fairly stable, tenants saw a big jump in housing costs, making rent a much larger part of their monthly budget, especially in popular areas," the report said.

Parts of Bengaluru saw high rental growth in H1 2025 due to improved infrastructure

NoBroker said that in 2023, Bengaluru saw its sharpest rent hike in over a decade, driven by strong demand and limited housing supply. The rent growth slowed to a more moderate 8% in the first half of 2025, hinting at a shift toward market balance.

However, some areas defied the cooling trend. Localities like Electronic City, KR Puram, and JP Nagar continued to see strong rental growth, fueled by metro expansions, new flyovers, better roads, and upcoming tech hubs that attracted fresh demand from startups and satellite offices, the report noted.

Ramamurthy Nagar saw a 10% rise in rents in H1 2025, supported by its affordable housing stock and proximity to metro connectivity. Electronic City followed closely with an 11% increase, benefiting from metro expansion and a surge in IT-related activity.

Areas like Bellandur, KR Puram, and BTM Layout each witnessed a 12% growth in rental values. Bellandur emerged as a central location, and KR Puram also emerged as a key hub due to upcoming metro lines and better access to the Outer Ring Road. BTM Layout, on the other hand, remained popular among students and young professionals due to its affordable housing options and convenient lifestyle, it said.

Peripheral areas have the potential to unlock affordable rentals

The Nobroker report said that several trends are emerging to unlock affordable rents in peripheral areas of KR Puram, Sarjapur Road, and Devanahalli. These infra upgrades will improve connectivity and enhance lifestyle by driving demand, rental appreciation, and long-term value.

Data from NoBroker showed that the current average rents for a 2BHK in Whitefield in Bengaluru East range between ₹25,000 and ₹40,000. With ongoing metro developments boosting connectivity, rents here are expected to rise by 10–12% over the next 6 to 12 months.

Bellandur and Sarjapur in the south and east, two rapidly developing IT hubs, have average 2BHK rents between ₹35,000 and ₹45,000. The influence of metro connectivity and new tech parks will likely drive a rental increase of 8–12% in the coming months.

KR Puram, where average 2BHK rents range from ₹20,000 to ₹30,000, is seeing infrastructure upgrades through metro projects and the Peripheral Ring Road (PRR). The report said this is expected to push rents up by 10–15% within the next year.

In Hebbal in the north, current 2BHK rents fall in the ₹28,000 to ₹40,000 range. Mall developments and tech park expansion are the key infrastructure drivers, likely resulting in a 10–12% rental spike.

Meanwhile, Devanahalli in north Bengaluru, with relatively affordable 2BHK rents between ₹12,000 and ₹17,000, is set for the steepest rise. The area is gaining momentum due to major projects like the Foxconn plant, BIAL ITIR, and new roads, with rents projected to climb by 12–20% in the next 6 to 12 months.