Rental yields on growth path

While the greenshoots of revival are peeping out in the residential segment after a drought of almost five years, the rental housing market is also blooming with some key markets registering rental yields of over 4 per cent. Tracking the recent data trends a makaan.com study has revealed 10 of 12 Tier-I cities in India witnessed landlords earning rental yields of over three per cent in July 2018. When compared to the rental yield in July 2017, the yield expansion was as high as 0.7 per cent for Ahmedabad and) 0.4 per cent in Chennai.

Tier-I cities included in the analysis are Ahmedabad, Bengaluru, Chennai, Delhi, Ghaziabad, Gurugram, Hyderabad, Kolkata, Noida, Pune, Faridabad and the Mumbai Metropolitan Region (MMR). Commenting on this new trend Ankur Dhawan Chief Investment Officer, PropTiger.com said, "Though capital values of property have dropped across the country, rentals have increased. This has improved rental yields for landlords. There is also additional trend of managed rentals and co-living which is improving rental yields for landlords."

Cities in focus

While rental real estate markets in Ahmedabad, Bengaluru and Kolkata reported the highest rental yield of 4.2 per cent each in July, Hyderabad followed closely at 4 per cent. In the MMR, rental yield remained unchanged year-on-year at 2.8%. Ahmedabad registered the highest jump of 0.7% in annual rental yield during this period.

However, NCR story has not been that happy. While Faridabad witnessed the highest drop of 0.7 per cent in rental yield, from 3.4 per cent in July 2017 to 2.7 per cent in July 2018, at 3 per cent in July 2018, Delhi's rental yield in July this year was 0.1 per cent lower than the same month last year. — TNS