India’s Rental Market Sees Strong Growth In April-June 2025 As Sales Stabilise: Report | Real Estate News

Last Updated:August 02, 2025, 15:54 IST

Rental demand and supply grows 3% QoQ in Q2 2025, while rental rates surge by 4.8% QoQ and a significant 29.6% YoY, signalling a strong shift toward leasing as preferred choice.

Among cities, Mumbai retained its position as the most expensive rental market, while Greater Noida, Ahmedabad, and Noida offered more affordable rental options.

India’s rental housing market is witnessing a sharp upswing, with both demand and rental rates climbing steadily during the April–June quarter of 2025, according to the latest Rental Index Report released by real estate portal Magicbricks. The growth comes even as home sales have started to stabilise across many urban markets.

Rental demand and supply grew 3% quarter-on-quarter (QoQ), while rental rates surged by 4.8% QoQ and a significant 29.6% year-on-year (YoY), signalling a strong shift toward leasing as a preferred housing choice. The report attributes this shift to several macroeconomic factors, including declining youth unemployment — down from 17.8% in 2018 to 10.2% in 2024 — and rising property prices, which are pushing many urban dwellers to opt for rental homes over ownership.

“The rental market is evolving in step with India’s urbanization story,” said Sudhir Pai, CEO of Magicbricks.

He noted that the rising supply in cities like Mumbai and Noida reflects growing investor interest, quicker project deliveries, and increasing recognition of the rental segment’s potential.

“Beyond the numbers, what we are witnessing is a deeper structural shift—tenants are increasingly embracing a ‘rental-first’ lifestyle, prioritising flexibility, well-connected locations, and affordability,” Pai said. “This expansion in supply is not just bridging the demand-supply gap but also supporting this cultural transition, meeting the aspirations of a mobile, affordability-conscious, and experience-driven urban workforce.”

Cities across India experienced significant shifts during the quarter. Greater Noida led the rental demand chart with a 20.7% QoQ rise, followed by Delhi (17.2%) and Ahmedabad (12.2%), reflecting a growing preference for leasing in cities with improving infrastructure and job connectivity.

In terms of supply, Greater Noida also saw a 12.6% QoQ increase, while Chennai posted an 11.4% rise. Over the year, Mumbai (23.4%), Navi Mumbai (22.7%), and Noida (22.3%) recorded the sharpest increase in rental listings, underlining robust interest among landlords and property investors.

Rental rates rose across the board, with Navi Mumbai recording the highest jump at 19.4%, followed by Kolkata (13.7%), Hyderabad (11.5%), and Chennai (11.2%). The consistent upward movement in rents indicates growing willingness among tenants to pay a premium for location, connectivity, and lifestyle features.

A notable trend in Q2 2025 was the surge in demand for compact 1 BHK units, particularly in cities like Navi Mumbai (27% QoQ), Gurugram (23%), Pune (19%), and Noida (18%). In contrast, demand for 3 BHK homes fell sharply in key cities, with Gurugram (-25%), Delhi (-24%), Ahmedabad (-21%), and Noida (-21%) all showing a clear trend toward downsizing. Nationally, 2 BHK units remained the most in-demand, accounting for 46% of total demand.

The semi-furnished category continued to dominate the rental market, contributing to 52% of total demand and 53% of supply. The majority of tenant interest focused on homes between 500 and 1,500 square feet, and the Rs 10,000-Rs 20,000 per month rental bracket remained the most active segment, with a 36% share of national demand.

Among cities, Mumbai retained its position as the most expensive rental market, while Greater Noida, Ahmedabad, and Noida offered more affordable rental options. Interestingly, Ahmedabad, Chennai, Hyderabad, and Navi Mumbai recorded the highest gross rental yields at 4.1%, making them attractive destinations for rental investors.

Magicbricks noted that while the current pace of rental growth remains high, the momentum is expected to moderate slightly in the coming quarters as supply expands further. However, the broader trend of a rental-first mindset, preference for compact and affordable housing, and growing urban mobility signals a lasting shift in India’s housing market dynamics.

The Q2 2025 report underscores that the Indian rental market is no longer just a fallback option but a strategic lifestyle choice reshaping the contours of urban living.

Mohammad Haris

Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More

Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More

Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated!view commentsNews business » real-estate India’s Rental Market Sees Strong Growth In April-June 2025 As Sales Stabilise: ReportDisclaimer: Comments reflect users’ views, not News18’s. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.

Read More

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}