A surge in housing supply resulted in a nearly 50% drop in rental price growth in top cities in the second quarter this year (to date) - registering a 2% - 4% quarterly rise which is down from 4% - 9% in the first quarter this year, a report showed today.

With more new supply entering the markets, a highly speculative residential rental spike is coming to a halt, according to the latest Anarock data.

The top seven cities are set to deliver nearly 5.31 lakh new units in 2024 while in 2023, these cities saw about 4.35 lakh units being delivered.

This denotes a 22% annual supply increase this year if delivery schedules remain on track.

“In India, the second quarter of most years typically sees rents increase more than in other quarters due to the commencement of the new academic year and the employment of new staff,” said an executive from a property consultancy firm.

This year, declining rental value growth coincides with substantial new housing supply entering these markets, he added.

Average rents for a standard 1,000 sq feet 2-BHK accommodation in Bengaluru’s Whitefield rose by 4% in Q2 - from ₹32,500 a month in Q1 to ₹35,000 a month in Q2 (to date).

In Q1 2024, the quarterly jump against Q4 2023 was doubled at 8% for the same flat in Bengaluru.

In Noida Sector 150, the average rent rose by a mere 4% - from about ₹24,000 per month in Q1 to approximately ₹25,000 a month in the current quarter. The quarterly hike stood at 9% in Q1 against Q4 2023.

Sohna Road in Gurugram and Dwarka in Delhi saw their respective quarterly rents increase by 3% and 2% in Q2 2024; in Q1 2024, the hikes stood at 4% and 6%, respectively, the report showed.

Mumbai Metropolitan Region’s (MMR) key markets Chembur and Mulund saw average rents rise by just 2% against the preceding quarter (Q1 2024). In Q1 2024, they rose by over 4% against Q4 2023.

(This story was taken from a syndicated feed, and edited only for style by Gujarat Samachar Digital staff)