Capital appreciation outpaces rental income in India's top housing markets: Anarock report

Mumbai (Maharashtra) [India], March 17 (ANI): The answer to the 'rent or buy' question keeps changing as the Indian housing market evolves.
According to the latest ANAROCK data, capital values in the top 7 cities increased by a significant 128 percent between 2021 and 2024, while rental values in many micro markets appreciated less than the overall capital value growth.
An analysis of the key micro markets in the top 7 cities by Anarock showed that in major cities like Bengaluru, greater Mumbai, Delhi NCR, and Hyderabad, average capital values rose higher than rental values between 2021-end and 2024-end,
Anuj Puri, Chairman of ANAROCK Group, said, "On the other hand, localities in Pune, Kolkata, and Chennai saw the reverse trend--rental values appreciated more than capital values."
Anarock also shared insights from top markets where capital value growth outpaced rental value growth - 2021-end to 2024-end:
NCR's Sohna Road saw capital values go up by 59 per cent while rental values rose by 47 per cent. Sector-150 in Noida saw capital values appreciate by a whopping 128 per cent while rental values rose by just 66 per cent in the period.
In Mumbai's Chembur, capital value growth was 48 percent, while rental appreciation was lower at 42 percent. In Mulund, rental values rose by just 29 percent, while capital prices went up 43 percent.
Hyderabad's HITECH City and Gachibowli also saw similar dynamics--in HITECH City, rental value growth was 54 percent, and capital appreciation was 62 percent; in Gachibowli, rental values rose 62 percent, and capital values rose 78 percent.
While Bengaluru's Thanisandra Main Road saw capital values appreciate more (67 percent) than average rental values (62 percent) in the period, Sarjapur Road saw average monthly rental values increase more (76 percent) than capital values (63 percent).
On the other hand, key micro markets in Pune, Kolkata and Chennai saw higher rental values growth than the capital value appreciation between 2021-end to 2024-end:
Pune's Hinjewadi saw rental values appreciate by 57 per cent, while capital values rose by just 37 per cent. In Wagholi, rental value growth was 65 per cent while capital values rose by just 37 per cent.
In Kolkata's EM Bypass, rental value appreciation was 51 per cent, while capital values rose by just 19 per cent in this period. In Rajarhat, rental values grew by 37 per cent while capital appreciation was 32 per cent.
Chennai's Pallavaram recorded a 44 percent growth in rental values, while capital values rose by 21 percent. In Perambur, rental values grew by 36 per cent, while capital values rose 23 per cent.
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. The real estate consultant said this suggests strong long-term returns for investors 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," said 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." (ANI)