Summary of this article
Rents surge 14 per cent annually
Bengaluru leads rental market growth
Supply growth moderates rent escalation
India’s residential rental market witnessed strong growth in the first quarter of 2026, with average rents across major cities rising by 14 per cent on a year-on-year (y-o-y) basis, according to a recent Magicbricks Rental Index. The report highlights how urban housing demand continues to remain resilient despite growing affordability concerns and changing supply dynamics.
During the January–March 2026 period, rental values increased by 2 per cent indicating a continuation of the momentum in the rental market from the previous year. While rental demand grew modestly by 0.60 per cent quarter-on-quarter (q-o-q), supply expanded at a much faster pace. Available rental inventory rose 9 per cent consecutively and 12 per cent annually, mainly because of fresh project completions and handovers in developing residential corridors across major cities.
According to the report, India’s rental market is gradually entering a more balanced phase. Over the last few years, sharp rent escalations were largely driven by limited housing supply in major urban centres. However, with developers completing more projects and adding inventory in suburban and peripheral areas, the pace of rent growth is beginning to stabilise in certain cities.
Affordable and mid-range rental homes continued to dominate tenant preferences. Properties in the monthly rental bracket of Rs 10,000-20,000 accounted for the highest share of demand at 36 per cent, followed by homes priced between Rs 20,000 and Rs 30,000. Among housing units of preference, 2BHK apartments remained the most sought-after option, contributing nearly 45 per cent of total rental demand during the quarter. Semi-furnished homes also continued to attract the highest interest from both tenants and landlords because they offer a balance between affordability and convenience.
Among Indian cities, Bengaluru emerged as the strongest rental market performer in Q1 2026. Rental demand in the city increased 5.20 per cent quarter-on-quarter (q-o-q), while rents surged 8.60 per cent consecutively. The growth was largely driven by strong hiring activity in IT and technology corridors, especially in areas witnessing office expansion and infrastructure development.
Hyderabad also recorded a robust performance, with rents rising 15 per cent on a y-o-y basis due to sustained employment growth and infrastructure-led residential demand.
On the other hand, some markets in the Delhi- National Capital Region (Delhi-NCR) and Mumbai Metropolitan Region (MMR) experienced a softer momentum. Gurugram witnessed a sharp increase in supply of over 10 per cent during the quarter, but rents declined slightly as new inventory outpaced tenant demand. Similarly, Mumbai saw rising supply levels alongside a decline in rental demand. Despite this moderation, Mumbai continued to remain India’s most expensive rental market, while cities such as Greater Noida, Noida and Ahmedabad remained relatively affordable for tenants.
Through 2026, rising property prices continue to push many middle-income households toward renting instead of buying homes.
