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Bengaluru’s Key Areas See Housing Rents Grow Over 20% Y-o-Y in Q1 2023, Beat Other Cities

Bengaluru’s Thanisandra housing rents 2023
  • Thanisandra Main Rd & Marathahalli-ORR in Bengaluru record highest housing rents growth of 24% each on yearly basis in Q1 2023 (for a standard 2BHK home of 1,000 sq. ft. area)
  • Whitefield (Bengaluru) records 2nd best rental rate jump against other prominent areas of top 7 cities, sees 21% growth
  • Bengaluru’s Sarjapur Road comes next with 20% in avg. monthly rent growth b/w Q1 2022 & Q1 2023
  • Largely, areas in East & North Bengaluru have seen a spurt in rental demand
  • At 4.1%, Bengaluru currently has the highest rental yield as of Q1 2023-end among all major cities, followed by Mumbai with 3.9%
  • Housing rents in prominent markets in Bengaluru may rise further by between 5-12% in remaining 3 quarters of 2023

Mumbai, 20 April 2023: Residential rental demand has soared in most cities ever since offices and schools reopened after the 3rd Covid-19 wave in 2022, especially in the past one year and particularly in the country’s IT/ITeS capital Bengaluru – which has seen skyrocketing rental values. ANAROCK’s analysis of monthly housing rents across prominent areas of the top 7 cities finds that Bengaluru’s ThanisandraMain Road and Marathahalli-ORR saw residential rental values zoom up by 24% each between Q1 2022 and Q1 2023.

Average monthly rentals for a standard 2BHK home of 1,000 sq. ft. at Thanisandra Main Road increased from INR 21,000/month in Q1 2022 to INR 26,000/month in 2023. At Marathahalli-ORR, average monthly rentals increased from INR 22,500/month last year to INR 28,000/month in Q1 2023.

Interestingly, the next two hotspots were also in Bengaluru. Whitefield – another prominent IT/ITeSdestination – witnessed the 2nd-best rental value growth of 21% in this period, against all prominent localities in the top 7 cities of India.

In Whitefield, the average rents stood at INR 21,900/month in Q1 2022 and in Q1 2023, had reached INR 26,500/month.

The third spot was occupied by Bengaluru’s Sarjapur Road, which recorded rental value growth of 20% between first quarter of 2022 and 2023. Here, the average rentals were INR 22,500/month in Q1 2022 and INR 27,000/month in Q1 2023.

Prashant Thakur, Sr. Director & Head – Research, ANAROCK Group, says, “When it comes to rental demand and zooming rents, Bengaluru currently stands out among the top 7 cities, with East and North Bengaluru the biggest blips on the rental radar map owing to the IT/ITeS belt there. Whitefield, Sarjapur Road, Marathahalli-Bellandur Outer Ring Road, Thanisandra Main Road and even Hebbal are the clear chartbusters.”

“We anticipate residential rental values in the IT capital’s prominent markets to rise further by anywhere between 5-12% in 2023, depending on the location, property, builder-type and other aspects,” says Thakur. “In housing societies with limited supply but high demand, the rents could easily rise beyond 12%.”

Avg. Monthly Housing Rents for standard 2BHK of 1,000 Sq. ft. home (INR/Month)
CitiesMicro MarketsQ1 2022Q1 2023% Change (Q1 2022 vs Q1 2023)
HyderabadHITECH City24,00026,80012%
Gachibowli23,00025,60011%
Kondapur21,50024,00012%
NCRSohna Road26,00029,50013%
Sector-150 (Noida)16,50019,00015%
Dwarka20,00022,00010%
MMRChembur49,50058,00017%
Mulund40,00045,40014%
Ghodbunder road – Thane28,00032,00014%
KolkataEM Bypass19,50022,00013%
Rajarhat15,00016,50010%
Joka13,50015,00011%
BengaluruSarjapur Rd (excluding Sarjapur Village)22,50027,00020%
Marathahalli-ORR22,50028,00024%
Whitefield21,90026,50021%
Thanisandra Main Rd21,00026,00024%
PuneHinjewadi18,50022,00019%
Wagholi15,00017,00013%
Baner20,00023,00015%
ChennaiPerambur16,80018,50010%
Pallavaram15,50018,00016%
Oragadam12,20013,50011%
Source: ANAROCK Research

Top Housing Rents Markets – City-wise

Besides the prominent localities in Bengaluru, other cities also recorded notable rental values growth:

  • Pune’s three standout markets with high rental growth between Q1 2022 and Q1 2023 are Hinjewadi, Baner and Wagholi, which witnessed rental value growth of 19%, 15% and 13%, respectively
  • In Chennai, the top 3 markets to witness high rental values growth are Pallavaram, Peramburand Oragadam, with rents in this period growing by 16%, 10% and 11% respectively
  • In NCR, the top 3 markets were Sohna Road in Gurugram (rental values increased by 13%), Sector-150 in Noida (15% growth) and Dwarka in Delhi with a rental value growth of 10%  
  • In MMR, the top 3 markets for rental value growth were Chembur, Ghodbunder Road (Thane) and Mulund, which saw 17%, 14% and 14% growth, respectively
  • Kolkata’s top 3 markets with high rental value growth between Q1 2022 and Q1 2023 were EM Bypass, Joka and Rajarhat, where housing rents rose by 13%, 11% and 10%, respectively
  • In Hyderabad, the top 3 markets were HITECH City and Kondapur, which saw rental values increase by 12% each, and Gachibowli with 11% growth

Rental Yields

Residential rental yield (the annual rate of return an investor can earn from capital invested in a property) had for long stagnated in India. The national average stood at 3% for the last few years pre-pandemic. However, things began to change with rental demand spiking up post the pandemic in 2022. Among the top 7 cities, Bengaluru has the highest rental yield of 4.1% as of Q1 2023-end, followed by Mumbai with 3.9%. Pre-Covid, the rental yield in Bengaluru was at 3.6% – the highest back then, as well. 

(Note: Top 3 areas with high rental demand from each of the top 7 cities have been considered)

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