Luxury homes’ rent up 8-18% in last 2 years: Anarock data

Residential rental markets across the top seven cities have made a strong comeback after offices and schools reopened in 2022. Analysis of the average monthly rental trends across the leading luxury localities reveals that most markets saw double-digit growth in the last two years, with only a few exceptions.

The average monthly rentals in the prominent luxury micro-markets across the top seven cities increased anywhere between 8% and 18% in the last two years, according to Anarock. Mumbai’s Worli saw the highest rental growth of 18% in the period — from Rs 2 lakh per month in 2020 to Rs 2.35 lakh in 2022 for luxury homes of minimum 2,000 square feet area.

This was followed by Bengaluru’s Rajaji Nagar, which witnessed a 16% jump in the same period — from Rs 56,000 in 2020 to Rs 65,000 in 2022.

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Anuj Puri, chairman, Anarock Group, said, “Residential rental demand will skyrocket across the top cities in 2022, with schools reopening classrooms and most companies calling employees back to offices. Pent-up rental demand hitting the market has caused a demand-supply mismatch in many areas, resulting in monthly rental hikes. Also, post-Covid tenant preference has tilted towards large-size homes.”

Pre-Covid, average two-year luxury rental increases at a given time were largely single-digit, between 5-7%.

Meanwhile, capital appreciation in these luxury markets remained in single digits between 2% and 9% in the last two years. Bengaluru’s Rajaji Nagar witnessed the highest capital appreciation of 9%, with average prices increasing from Rs 5,698 per square feet in 2020 to Rs 6,200 per square feet in 2022.

The luxury residential market has been on an upswing post the pandemic, with its overall sales share growing to about 14% in H1 2022. Even demand for rental luxury properties is on a high, resulting in growth in average monthly rentals.

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