Capital Appreciation Surges In Noida, Hyderabad, Mumbai, Outpacing Rental Growth

Property prices in India's top real estate markets have seen unprecedented growth in the past three years, with capital values outpacing rental appreciation in key areas. According to ANAROCK Research, Noida’s Sector-150 recorded the highest surge, with property values skyrocketing by 128 per cent between 2021-end and 2024-end, far exceeding the 66 per cent rise in rental values for a standard 1,000 sq. ft. 2BHK apartment.

Hyderabad, NCR, and the Mumbai Metropolitan Region (MMR) witnessed similar trends, where capital appreciation surpassed rental growth. "An analysis of the key micro markets in the top seven cities shows that in major cities like Bengaluru, MMR, NCR, and Hyderabad, average capital values rose higher than rental values between 2021-end and 2024-end," said Anuj Puri, Chairman of ANAROCK Group.

NCR: The Fastest-Growing Real Estate Market

In the National Capital Region (NCR), Sector-150 in Noida led with a 128 per cent jump in capital values to Rs 13,000 per sq. ft. from Rs 5,700 per sq. ft. Sohna Road in Gurugram followed, experiencing a 59 per cent increase to Rs 10,500 per sq. ft. over the same period, while rental values rose by 47 per cent.

Mumbai MMR: The Most Expensive Market

While MMR remains India's costliest real estate region, areas like Chembur and Mulund also saw stronger capital appreciation than rental increases. Chembur’s property values climbed by 48 per cent to Rs 27,800 per sq. ft., whereas rental values increased by 42 per cent. Similarly, Mulund recorded a 43 per cent rise in property rates, with rentals growing at a slower pace of 29 per cent.

Umesh Rathore, VP- Sales & Marketing, VVIP Group, "For potential homebuyers, the argument between buying and renting is still the talk of the town. The long-term financial advantages of property ownership have been reaffirmed by the fact that capital appreciation has continuously outpaced rental growth over the years. Over the last four years, capital values in key markets, particularly Delhi-NCR, have increased considerably due to various developments including airports, IT parks, expressways, metro connectivity, influx of GCCs and expanding job centres. Given these factors, we think that the micro markets in Delhi-NCR, such as Noida, Greater Noida, and Gurugram, will continue to lead India's real estate development in the years to come."

Hyderabad: Rapid Growth in IT Hubs

Hyderabad’s key IT corridors—HITECH City and Gachibowli—also demonstrated significant capital appreciation. HITECH City recorded a 62 per cent jump in property values to Rs 9,300 per sq. ft., while rental values increased by 54 per cent. Gachibowli saw the highest capital appreciation in the city, with property values surging 78 per cent to Rs 8,900 per sq. ft.

Prakash Mehta, Chairman and Managing Director, Ocus Group, says "The commercial real estate market in Delhi-NCR has been witnessing strong capital appreciation, outpacing rental growth due to increasing investor confidence and a robust demand for quality office spaces. As per Colliers' report, India remains a high-growth real estate market, with office assets attracting the majority of investments, accounting for 47% of total inflows. Notably in Gurugram, the region’s rapid infrastructure advancements, expansion of business districts, and the influx of global companies have further fueled capital appreciation. Meanwhile, rental growth remains steady, influenced by long-term lease structures and affordability considerations.

Bengaluru: Mixed Trends in Capital and Rental Growth

Bengaluru presented a mixed trend. On Thanisandra Main Road, capital values rose 67 per cent to Rs 8,900 per sq. ft., outpacing rental growth of 62 per cent. However, in Sarjapur Road, rental values increased 76 per cent, surpassing the 63 per cent rise in capital appreciation.

Moderate Growth in Pune, Kolkata, and Chennai

Unlike NCR, MMR, and Hyderabad, Pune, Kolkata, and Chennai witnessed rental values growing at a faster pace than capital appreciation. In Pune’s Hinjewadi, rental values increased by 57 per cent, while capital values appreciated by only 37 per cent. A similar trend was seen in Kolkata’s EM Bypass, where rental rates surged by 51 per cent, but property prices rose only 19 per cent. Chennai’s Pallavaram also recorded stronger rental growth (44 per cent) than capital value appreciation (21 per cent).

Harsh Gupta, CEO, Sundream Group, said, that Delhi-NCR’s real estate market is witnessing a surge in capital appreciation as more buyers prioritize ownership over renting. Factors such as infrastructure upgrades, improving connectivity, and the rise of premium developments have fueled this trend. Many buyers see real estate as a wealth-building asset, leading to heightened demand and price surges in key locations like Noida.

Investment Trends: Capital Appreciation vs. Rental Yields

The divergence between capital and rental growth highlights shifting investment dynamics. "More than ever, investors must align their strategy along very location-specific lines. 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," noted Anuj Puri.

For homebuyers, the data suggests that while some markets offer strong long-term returns through capital appreciation, others may be more lucrative for rental income. With property values surging faster than rental yields in many top cities, the 'rent vs. buy' decision hinges on location-specific trends and long-term investment goals.

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