Ahmedabad, Bengaluru, Pune Lead As Rental Yields Surge Across Indian Cities

Rental yields are on the rise across India, with Ahmedabad, Bengaluru, and Pune emerging as the top cities for investors seeking better returns. The latest Magicbricks Rent Index on May 5, 2025, revealed that rents in major metros have jumped by an average of 10 per cent in just three months, with corresponding improvements in gross rental yields strengthening the investment case for residential real estate.

Ahmedabad recorded the sharpest improvement in rental yield, rising from 3.6 per cent in Q1 2024 to 4.2 per cent in Q1 2025. Bengaluru followed with an increase from 3.6 per cent to 3.8 per cent, while Hyderabad climbed from 3.4 per cent to 3.7 per cent. Mumbai, India’s most expensive market, saw yields move up from 3.8 per cent to 3.9 per cent over the same period, as per the Magicbricks Rent Index report.

Rent spikes were led by Bengaluru, which witnessed a growth of 15.7 per cent, and Pune, which saw a surge of 12.5 per cent, with average rents for a 1,000 sq. ft. unit reaching Rs 36,772 and Rs 31,439, respectively. Meanwhile, Mumbai topped the price chart at Rs 98,431, the report Magicbricks Rent Index added.

“In premium rental markets like Mumbai, 43 per cent of rental demand, Gurugram 37 per cent, and Bengaluru 26 per cent, the demand was concentrated in the Rs 50,000 - Rs 1,00,000 per month budget bracket,” the report noted. In contrast, the affordable segments dominated in Ahmedabad stood at 49 per cent, Pune at 38 per cent, and Navi Mumbai at 32 per cent, reflecting a diversified market profile.

Though the broader trend remains upward, NCR cities are showing early signs of cooling. Rental demand in Noida fell by 3.3 per cent, while Greater Noida dropped by 13.3 per cent, suggesting a plateau after months of steady growth. Yet, affordability remains a magnet. In Greater Noida, 86 per cent of demand was for rentals priced between Rs 10,000–20,000 per month.