Capital Value Outpaces Rental Value In Hyd’s Key Micro Mkts

The clear divergence between capital appreciation and rental growth in these areas indicates that homeownership is becoming more lucrative in key markets where property values are rising faster than rental yields. For investors, this suggests strong long-term returns in cities like Hyderabad, Noida, and MMR, where capital appreciation outpaces rental growth – Anuj Puri, Chairman, Anarock Group

Hyderabad: The rental value of residential properties in Hyderabad’s leading micro markets, Hitech City and Gachibowli, has appreciated less than the overall capital appreciation value growth over the last three years, a report said.

The average monthly rent in Hitech City was at Rs 23,000 in 2021-end, which grew by 54 per cent to Rs 35,400 by 2024-end. The average monthly rent in Gachibowli grew by 62 per cent, from Rs 22,000 to Rs 35,700, over the last three years. However, the capital price of homes has appreciated at a higher value as against rental cost in these two micro markets, according to latest Anarock data.

The average capital value of residential property in Hitech City grew by 62 per cent, from Rs 5,753 per sft to Rs 9,300 per sft, in three years. The average capital value in Gachibowli shot up by 78 per cent, from Rs 5,010 per sft in end of 2021, to Rs 8,900 per sft by end of 2024.

“The clear divergence between capital appreciation and rental growth in these areas indicates that homeownership is becoming more lucrative in key markets where property values are rising faster than rental yields. For investors, this suggests strong long-term returns in cities like Noida, Hyderabad, and MMR, where capital appreciation outpaces rental growth,” said Anuj Puri, Chairman, Anarock Group.

Purifurther suggested that those looking for long-term capital appreciation can target markets with high appreciation, while rental-focused investors should zero in on localities where rents are rising steadily. For homebuyers, it is extremely important to weigh property price trends against rental growth to understand if buying or renting makes more financial sense in each location, he added.