Rent hike: Almost all parts of the country have seen a strong increase in house rent in the first quarter of 2025. According to the latest data of the digital property search platform Magicbricks, India’s major metro cities saw an increase of up to 10% in average fare rates between January and March. Along with this, there was a tremendous increase in the demand of houses in tourist spots and hill stations.
How much rent increased in which city?
There was a quarter increase of 15.7% in Bengaluru and 12.5% in Pune. These cities were at the forefront of rental growth. At the same time, 7.9% in Noida, 10.2% in Mumbai and 7.3% in Delhi. Kolkata also saw an increase of 10.2%, while Chennai increased by 5.6% and Hyderabad by 4.8%.
The fare in NCR’s micro-markets such as Greater Noida (3.2%) and Gurugram (4.1%) remained more or less stable. This indicates the balance of demand in these areas.
Vishal Raheja, founder and managing director of Investoxpert, says that India’s rental market is going through a structural change. He said, ‘The increase in Bangalore and Pune is not just a recovery after Kovid. Actually, this demand suggests that employment is increasing in urban areas with innovation, while the facility of housing is not increasing.
Demand in premium and affordable segment
According to data from MagicBricks, 43% in Mumbai, 37% in Gurugram and 26% rental demand in Bangalore were focused in a premium budget segment of ₹ 50,000 to ₹ 1,00,000 per month. In contrast, the demand in Ahmedabad (49%), Pune (38%) and Navi Mumbai (32%) was high in affordable range of ₹ 20,000 to ₹ 30,000 per month.
Greater Noida had a segment of 86% fare demanding ₹ 10,000 to ₹ 20,000 per month. This shows that the demand for affordable housing is high.
Return improvement on fare investment
According to the Rent Index report of the magicbricks, the gross rental yield has increased on an annual basis in most cities (see table). Rental yield means – the annual fare received from a property, how much returns it gives compared to its total price. It can also be called “Return on Property Investment”.
For example, if you bought a flat for ₹ 50 lakh and rent it ₹ 20,000 every month, then the rental yield would be 4.8%. Rental yields in India usually live between 2% to 4%. The yield of 5% or above is considered quite good.
| City | Q1 2024 Rental Yield | Q1 2025 Rental Yield | shift (%) |
| Ahmedabad | 3.60% | 4.20% | 0.006 |
| Bengaluru | 3.60% | 3.80% | 0.002 |
| Hyderabad | 3.40% | 3.70% | 0.003 |
| Mumbai | 3.80% | 3.90% | 0.001 |
Need to help the balance of demand supply
Experts believe that the gap between the demand and supply in the mid-to-Premium Rental segment is now getting deeper. In this regard, it has become necessary to strengthen the structure of rental housing of developers and urban arrangements.
Neworld Developers Chairman Sunil Sisodia said that the impact of fare rates in metro cities is now spreading to Tier 2 and Tier 3 regions. In NCR, towns like Meerut, Sonipat and Bahadurgarh, while towns like Tumkuru and Hosur around Bengaluru are becoming fast emerging real estate centers.
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