Top Luxury Housing Markets See Up To 18% Rental Growth in Last 2 Years

 

• Among localities in top 7 cities, Mumbai’s Worli saw highest rental growth (18%); avg. rentals (for a min. 2,000 sq. ft. home) increased from INR 2 lakh in 2020 to INR 2.35 lakh in 2022
• Bengaluru’s Rajajinagar saw a 16% jump in the same period – from INR 56,000 in 2020 to INR 65,000 in 2022
• Most top luxury markets saw double-digit growth in rentals in the last two years; pre-Covid, the avg. 2-year luxury rental hikes were single-digit
• Capital appreciation in these luxury markets remained in single digits (2-9%) in last 2 years; Bengaluru’s Rajaji Nagar saw highest capital appreciation of 9% with avg. prices – from INR 5,698 per sq. ft. to INR 6,200 per sq. ft.

 

Residential rental markets across the top 7 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 in the top 7 cities reveals that most markets have saw double-digit growth in the last two years, with only a few exceptions.

 

As per latest ANAROCK data, the average monthly rentals in the prominent luxury micro-markets across the top 7 cities increased anywhere between 8-18% in the last two years. Mumbai’s Worli saw the highest rental growth of 18% in the period – from INR 2 lakh per month in 2020 to INR 2.35 lakh in 2022 for luxury homes of minimum 2,000 sq. ft. area.

 

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

 

Anuj Puri, Chairman – ANAROCK Group, says, “Residential rental demand skyrocketed 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.”

 

“Most prominent luxury housing markets witnessed double-digit growth in rentals in the last two years,” says Puri. “Pre-Covid, average 2-year luxury rental increases at a given time were largely single-digit, between 5-7%.”

 

 

Avg. Monthly Rentals: Top Luxury Markets (For 2,000 sq. ft. area)
City	Micro Market	2020 (INR)	2022 (INR)	% Appreciation (2020 vs 2022)
Bangalore	JP Nagar	46,000	52,000	13%
	Rajaji Nagar	56,000	65,000	16%
Chennai	Anna Nagar	56,000	63,000	13%
	Kotturpuram	74,000	84,000	14%
Hyderabad	Jubilee Hills	54,000	62,000	15%
	HiTech City	53,000	59,000	11%
Kolkata	Alipore	60,000	65,000	8%
	Ballygunge	88,000	97,000	10%
MMR	Tardeo	2,70,000	3,10,000	15%
	Worli	2,00,000	2,35,000	18%
NCR	Golf Course Ext. Rd	50,000	56,000	12%
	Golf Course Rd	70,000	78,000	11%
Pune	Koregaon Park	59,500	68,000	14%
	Prabhat Road	64,000	69,000	8%

Source: ANAROCK Research

 

Capital Appreciation

 

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

 

Top Luxury Hotspots – Rental vs Capital Price Changes

 

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.

 

Some of the prominent luxury markets in the top 7 cities that performed well in 2022 and may see further short to mid-term boosts:

 

 

Avg. Capital Prices: Top Luxury Markets
City	Micro Markets	2020 (INR/sft.)	2022 (INR/sft.)	% Appreciation (2020 vs 2022)
Bangalore	JP Nagar	5,698	6,200	9%
Bangalore	Rajaji Nagar	13,300	13,900	5%
Chennai	Anna Nagar	11,300	11,850	5%
Chennai	Kotturpuram	13,500	14,000	4%
Hyderabad	Jubilee Hills	6,950	7,400	6%
Hyderabad	HiTech City	5,675	6,100	7%
Kolkata	Alipore	13,000	13,500	4%
Kolkata	Ballygunge	11,350	11,700	3%
MMR	Tardeo	41,862	43,000	3%
MMR	Worli	38,560	39,350	2%
NCR	Golf Course Ext. Rd	8,300	8,700	5%
NCR	Golf Course Rd	13,150	13,500	3%
Pune	Koregaon Park	11,128	11,600	4%
Pune	Prabhat Road	12,500	12,900	3%

Source: ANAROCK Research

 

• Bengaluru – the luxury residential hotspot JP Nagar saw avg. monthly rentals appreciate by 13% in 2022 over 2020, while capital prices in this period rose by 9%. Likewise, Rajajinagar saw rental prices rise by 16%, and capital prices by 5%.
• MMR – luxury rentals in Tardeo rose 15% in this period, while capital prices increased by only 3%. Similarly, in Worli, the average monthly rentals for a minimum 2,000 sq. ft. area home increased by 18%, while capital prices saw a mere 2% jump.
• NCR – rentals in luxury hotspot Golf Course Road increased by 11%, while capital prices saw a mere 3% rise. Likewise, Golf Course Extension Road saw rentals increase by 12% and capital prices by 5% in this period. 
• Chennai – luxury rentals in Anna Nagar rose 13% in this period, while capital prices increased by 5%. Similarly, in Kotturpuram, the average monthly rentals rose by 14% while capital prices rose by 4%.
• Hyderabad – the luxury residential hotspot Jubilee Hills saw avg. monthly rentals appreciate by 15% in 2022 over 2020, while capital prices in this period rose 6%. HITECH City saw a rental price rise of 11%, while capital prices increased by 7%.
• Pune – the rentals in Koregaon Park rose 14% in this period, while capital prices increased by 4%. In Prabhat Road, the average monthly rentals rose by 8% while capital prices rose by just 3%.
• Kolkata – luxury home rentals in Alipore rose 8% in 2022 against 2020, while capital prices increased by 4%. Similarly, in Ballygunge, the average monthly rentals rose 10% while capital prices rose by 3%.