Metro housing rents surge; Bengaluru, Pune top in Q1 2025

Key Highlights

• Metro Rental Surge: Rentals in major Indian metro cities rose sharply in Q1 2025, with Bengaluru (15.7 percent) and Pune (12.5 percent) seeing the highest quarterly growth, driven by hybrid work and tech-sector job growth.
• Growing Rental Yields: Cities like Ahmedabad, Bengaluru, Hyderabad, and Mumbai reported increased rental yields, making property rentals more attractive to investors.
• Shift to Satellite Cities: High rental costs in urban centers are pushing demand toward emerging micro-markets like Meerut, Sonipat, Bahadurgarh (NCR) and Tumkur,, Hosur (Bengaluru), offering better affordability and value.

Rising rental costs in main metropolitan areas and increased interest in property in popular tourist areas are causing a powerful boom in the Indian real estate market.

Magicbricks reports that rentals in big metro cities went up by 10 percent between January and March 2025, despite increased demand in hill stations popular among tourists. The numbers show Bengaluru (15.7 percent) and Pune (12.5 percent) had the highest quarterly growth in rentals, with Noida rising 7.9 percent in Q1 2025.

According to Vishal Raheja, Founder and MD, InvestoXpert, the change in India’s rental market affects structures and increases in Bengaluru and Pune suggest that economic recovery isn’t the only cause.

“They reflect a fundamental rebalancing of demand across innovation-driven urban clusters, where rapid job creation in tech, R&D, and start-ups is outpacing housing supply. Bengaluru’s surge, for instance, is closely tied to the return of talent and hybrid work models that demand proximity to core tech zones without full-time office constraints,” he said.

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The report also points out that overall, rental yields are going up in most cities, so renting property seems more attractive. In Q1 2025, Ahmedabad was at the top with gross rental yield increasing from 3.6 percent YoY in the previous quarter to 4.2 percent. The cities of Bengaluru, Hyderabad and Mumbai all showed rises in consumer inflation, from 3.6 percent to 3.8 percent for Bengaluru, 3.4 percent to 3.7 percent for Hyderabad and 3.8 percent to 3.9 percent for Mumbai. The current demand emphasizes that developers and urban planners must increase rental housing while making certain that everyone can afford it.

Sunil Sisodiya, Founder and Chairman, Neworld Developers, noted that because rental markets in big cities are getting busier, demand will flow into surrounding smaller regions. He noted that since both homes and rental properties are getting more expensive and harder to get in city centers, more people are interested in nearby satellite zones.

“For instance, in NCR, this includes emerging hotspots like Meerut, Sonipat, and Bahadurgarh, while Bengaluru’s overflow is benefiting areas like Tumakuru and Hosur. These micro-markets offer a more balanced cost-value equation and are becoming attractive to remote and hybrid workers. Developers and planners must now view these regions as the next frontier for sustainable rental growth,” he said.