India's real estate market booms with highest rental yields globally
Real Estate

India's real estate market booms with highest rental yields globally

India's real-estate market has experienced an unprecedented surge over the past two years, witnessing exponential growth in rentals. With prices soaring, property owners enjoy the lucrative returns on their investments. Remarkably, India boasts one of the highest net rental yields globally, a trend that continues to capture attention.

According to data from NoBroker, India's average rental inflation has outstripped major cities like Singapore, London, and New York. While Singapore saw an average rental inflation of around 29%, India's figures surpass even these, with certain areas experiencing a remarkable increase of 30% or more.

The driving factors behind this surge are multifaceted. As major cities witness the reopening of offices, the demand for properties around IT parks and business hubs has skyrocketed, far outpacing supply. Additionally, the advent of new metro corridors in cities like Mumbai and Bangalore has further fuelled demand, resulting in a 15%-18% rent inflation for properties along these corridors.

Bangalore, in particular, has witnessed a staggering 24% average rent inflation, with some areas experiencing a remarkable 30% rise. Similar trends are evident in other major cities like Hyderabad and Chennai, where average rent inflations stand at 18% and 16%, respectively, with pockets experiencing up to 25% spikes.

Unsurprisingly, NoBroker's annual survey indicates that 86% of landlords are considering purchasing additional properties to capitalize on this trend.

Speaking to FinancialExpress.Com, Saurabh Garg, Co-founder & Chief Business Officer of NoBroker.com, attributed India's high rental inflation to several factors. The gradual return to office spaces has led to a surge in demand for housing in major cities, exacerbated by the disruptions caused by the COVID-19 pandemic. Despite gradual increases in supply, demand continues to outpace availability.

Another significant contributor to rising rentals is the growing preference for gated societies, particularly in close proximity to office parks. In Bangalore, for instance, rental inflation for residential units near offices and within gated communities ranges from 25% to 40%.

Garg noted that "on the contrary, the net rental inflation in other developed nations remains lower than that in India. This is chiefly due to the fact that these countries have still not been able to shift completely to work from the office, and their employees are still operating from home or in a hybrid model. As a result, the demand for properties in urban centres has not surged to the same extent as in India".

India's real estate market continues to defy global trends, offering investors unprecedented opportunities amidst evolving workplace dynamics.

India's real-estate market has experienced an unprecedented surge over the past two years, witnessing exponential growth in rentals. With prices soaring, property owners enjoy the lucrative returns on their investments. Remarkably, India boasts one of the highest net rental yields globally, a trend that continues to capture attention. According to data from NoBroker, India's average rental inflation has outstripped major cities like Singapore, London, and New York. While Singapore saw an average rental inflation of around 29%, India's figures surpass even these, with certain areas experiencing a remarkable increase of 30% or more. The driving factors behind this surge are multifaceted. As major cities witness the reopening of offices, the demand for properties around IT parks and business hubs has skyrocketed, far outpacing supply. Additionally, the advent of new metro corridors in cities like Mumbai and Bangalore has further fuelled demand, resulting in a 15%-18% rent inflation for properties along these corridors. Bangalore, in particular, has witnessed a staggering 24% average rent inflation, with some areas experiencing a remarkable 30% rise. Similar trends are evident in other major cities like Hyderabad and Chennai, where average rent inflations stand at 18% and 16%, respectively, with pockets experiencing up to 25% spikes. Unsurprisingly, NoBroker's annual survey indicates that 86% of landlords are considering purchasing additional properties to capitalize on this trend. Speaking to FinancialExpress.Com, Saurabh Garg, Co-founder & Chief Business Officer of NoBroker.com, attributed India's high rental inflation to several factors. The gradual return to office spaces has led to a surge in demand for housing in major cities, exacerbated by the disruptions caused by the COVID-19 pandemic. Despite gradual increases in supply, demand continues to outpace availability. Another significant contributor to rising rentals is the growing preference for gated societies, particularly in close proximity to office parks. In Bangalore, for instance, rental inflation for residential units near offices and within gated communities ranges from 25% to 40%. Garg noted that on the contrary, the net rental inflation in other developed nations remains lower than that in India. This is chiefly due to the fact that these countries have still not been able to shift completely to work from the office, and their employees are still operating from home or in a hybrid model. As a result, the demand for properties in urban centres has not surged to the same extent as in India. India's real estate market continues to defy global trends, offering investors unprecedented opportunities amidst evolving workplace dynamics.

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