Rent or Buy? Study Shows Rental Value is Rising Faster Than Property Prices in Pune, Kolkata, and Chennai
In a surprising twist, Pune, Kolkata, and Chennai are bucking the national trend in India’s real estate market, with rental values growing faster than property prices. According to a recent analysis by Anarock, a leading real estate consultancy, these cities are witnessing a significant shift in market dynamics, offering unique opportunities for investors and renters alike.
While cities like Bengaluru, Mumbai Metropolitan Region (MMR), National Capital Region (NCR), and Hyderabad continue to see property prices rise faster than rental values, the opposite is true for Pune, Kolkata, and Chennai. For instance, Pune’s Hinjewadi area recorded a 57% increase in rental values compared to a 37% rise in capital appreciation. Similarly, Kolkata’s EM Bypass saw rentals grow by 51%, far outpacing the 19% increase in property prices. In Chennai’s Pallavaram, rental values surged by 44%, nearly double the 21% growth in capital values.
This trend stands in stark contrast to markets like Noida’s Sector 150, where property prices more than doubled, rising by 128%, while rental values increased by a comparatively modest 66%. Similarly, in Hyderabad’s HITECH City and Gachibowli, capital appreciation consistently outpaced rental growth.
Anuj Puri, Chairman of Anarock, highlighted the implications of this divergence. “Major cities like Bengaluru, MMR, NCR, and Hyderabad are seeing stronger capital appreciation, making homeownership more attractive. However, in Pune, Kolkata, and Chennai, rental yields are outperforming price growth, which could make these cities more appealing for rental-focused investors,” he explained.
The data underscores the importance of tailoring real estate strategies to specific micro-markets. For instance, investors seeking capital gains might find opportunities in Noida or Hyderabad, while those prioritizing rental yields could turn their attention to Pune or Kolkata.
This shift in India’s real estate landscape signals that a one-size-fits-all approach no longer works. Whether you’re an investor or an end-user, understanding these granular trends is key to making informed decisions and maximizing returns in an ever-evolving market.
