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Rental appreciation trumps capital price growth in top luxury markets since 2014


Amidst various industry reforms in the last seven years, multiple new trends emerged in the Indian residential real estate market. Strikingly, housing rentals in key luxury markets saw better y-o-y growth between 2014 and 2020 than average capital prices in the same localities.

Anuj PuriAnuj Puri, Chairman – ANAROCK Property Consultants says, “The average rentals for a house of minimum 2,000 sq. ft. size in the top 7 cities’ key luxury hotspots rose anywhere between 17% and 26% in 2020, as compared to 2014. In the same period, average capital prices in these micro-markets saw a maximum rise of 15% – and some even saw a marginal dip.”

To illustrate – ANAROCK data indicates that the average monthly rentals in Gurugram’s Golf Course Road increased by 17% in 2020 over 2014, while average property prices in the same period declined marginally – from INR 13,167 per sq. ft. in 2014 to INR 13,150 per sq. ft. in 2020.

Among the top 7 cities, Hyderabad’s HITECH City saw the highest rental appreciation of 26% between 2014 and 2020; in the same period, average property prices saw a 12% jump.

“ANAROCK data also reveals that from 2014 to 2020, rental prices in the top luxury markets saw consistent y-o-y growth – averaging between 3-6% annually,” says Mr Puri. “In contrast, capital appreciation in this period either remained range-bound or varied each year. Some years saw a decent yearly rise, even as high as 7%, while prices dropped by approx. -5% in other years – particularly in 2017, when many micro-markets saw capital prices plunge against the preceding year.”

In 2017, various structural reforms like RERA and GST were implemented. After this period, most localities only saw a marginal capital price rise averaging between 1-3% – while rental markets continued their growth run.


Due to the pandemic, 2020 was an outlier year for Indian rental markets, with most luxury localities recording either no change in average monthly rentals (compared to the preceding year) or seeing some decline. Without a doubt, COVID-19 impacted luxury rental markets amidst the growing WFH culture. Average property prices showed little or no change in 2020 over 2019.

Top Luxury Hotspots – Rental vs Capital Price Changes

The luxury residential rental market saw a setback due to COVID-19, but now appears to have recovered with demand for rental luxury properties back almost to pre-COVID levels. Monthly rentals in some of the localities have begun heading north. With vaccinations now rolling out and positivity returning, these rental market will pick up new momentum.

Some of the prominent luxury markets in the top 7 cities that performed well between 2014 and 2020 may see further short to mid-term boosts:

  • In Bengaluru, the luxury residential hotspot JP Nagar saw avg. monthly rentals appreciate by 24% in 2020 over 2014, while capital prices in the period rose by 8%. Likewise, Rajajinagar saw rental prices rise by 22%, and capital prices by 15%.
  • In MMR, luxury rentals in Tardeo rose 23% in this period, while capital prices increased by 8%. Similarly, in Worli, the average monthly rentals for a minimum 2,000 sq. ft. area home rose by 21%, while capital prices rose by 6%.
  • In NCR, rentals in luxury hotspot Golf Course Road increased by 17% while capital prices saw a meagre decline. In contrast, Golf Course Extension Road saw rentals increase by 18% and capital prices by 7% in this period.
  • In Chennai, luxury rentals in Anna Nagar rose 17% in this period, while capital prices increased by 10%. Similarly, in Kotturpuram, the average monthly rentals rose by 19% while capital prices rose by 7%.
  • In Hyderabad, the luxury residential hotspot Jubilee Hills saw avg. monthly rentals appreciate by 15% in 2020 over 2014, while capital prices in this period rose 10%. HITECH City saw the maximum rental price rise of 26%, while capital prices increased by 12%.
  • In Pune, the rentals in Koregaon Park rose 19% in this period, while capital prices increased by 14%. Similarly, in Prabhat Road, the average monthly rentals rose by 23% while capital prices rose by just 5%.
  • In Kolkata, luxury home rentals in Alipore rose 20% in 2020 against 2014, while capital prices increased by 13%. Similarly, in Ballygunge, the average monthly rentals rose 19% while capital prices rose by 13%.
Avg. Monthly Rentals: Top Luxury Markets (For 2,000 sq. ft. area)
City Micro Market 2014 (INR) 2020 (INR) % Appreciation (2020 vs 2014)
Bengaluru JP Nagar 37,000 46,000 24%
Bengaluru Rajaji Nagar 46,000 56,000 22%
Chennai Anna Nagar 48,000 56,000 17%
Chennai Kotturpuram 62,000 74,000 19%
Hyderabad Jubilee Hills 47,000 54,000 15%
Hyderabad HiTech City 42,000 53,000 26%
Kolkata Alipore 50,000 60,000 20%
Kolkata Ballygunge 74,000 88,000 19%
MMR Tardeo 2,20,000 2,70,000 23%
MMR Worli 1,65,000 2,00,000 21%
NCR Golf Course Ext. Rd 42,500 50,000 18%
NCR Golf Course Rd 60,000 70,000 17%
Pune Koregaon Park 50,000 59,500 19%
Pune Prabhat Road 52,000 64,000 23%

Source: ANAROCK Research

Avg. Capital Prices: Top Luxury Micro Markets
City Micro Markets 2014 (INR/sft.) 2020 (INR/sft.) % Appreciation (2020 vs 2014)
Bengaluru JP Nagar 5,259 5,698 8%
Bengaluru RajajiNagar 11,534 13,300 15%
Chennai Anna Nagar 10,288 11,300 10%
Chennai Kotturpuram 12,650 13,500 7%
Hyderabad Jubilee Hills 6,300 6,950 10%
Hyderabad HiTech City 5,088 5,675 12%
Kolkata Alipore 11,500 13,000 13%
Kolkata Ballygunge 10,005 11,350 13%
MMR Tardeo 38,717 41,862 8%
MMR Worli 36,388 38,560 6%
NCR Golf Course Ext. Rd 7,778 8,300 7%
NCR Golf Course Rd 13,167 13,150 0%
Pune Koregaon Park 9,794 11,128 14%
Pune Prabhat Road 11,850 12,500 5%

Source: ANAROCK Research