Capital Appreciation Outpaces Rental Growth at 128% in Key Markets: ANAROCK

Mumbai, March 17, 2025: The answer to the ‘rent or buy’ question keeps changing as the Indian housing market evolves. Latest ANAROCK data finds that capital values in key micro markets of the top seven cities have grown by a significant 128 per cent between 2021-end and 2024-end, while rental values in many micro markets have appreciated less than the overall capital value growth.

“An analysis of the key micro markets in the top 7 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,” says Anuj Puri, Chairman of ANAROCK Group. “On the other hand, localities in Pune, Kolkata and Chennai saw the reverse trend – rental values appreciated more than the capital values.”

Top markets where capital value growth outpaced rental value growth

• NCR’s Sohna Road saw capital values go up by 59 per cent while rental values rose by 47 per cent. Sector-150 in Noida saw capital values appreciate by a whopping 128 per cent while rental values rose by just 66 per cent in the period.
• In Mumbai’s Chembur, capital value growth was 48 per cent while rental appreciation clocked in lower at 42 per cent. In Mulund, rental values rose by just 29 per cent while capital prices went up 43 per cent.
• Hyderabad’s HITECH City and Gachibowli also saw similar dynamics – in HITECH City, rental value growth was 54 per cent and capital appreciation was 62 per cent; in Gachibowli, rental values rose 62 per cent and capital values 78 per cent.
• While Bengaluru’s Thanisandra Main Road saw capital values appreciate more (67 per cent) than avg. rental values (62 per cent) in the period, Sarjapur Road saw average monthly rental values increase more (76 per cent) than capital values (63 per cent).
• On the other hand, key micro markets in Pune, Kolkata and Chennai saw higher rental values growth than the capital value appreciation between 2021-end to 2024-end:
• Pune’s Hinjewadi saw rental values appreciate by 57 per cent, while capital values rose by just 37 per cent. In Wagholi, rental value growth was 65 per cent while capital values rose by just 37 per cent.
• In Kolkata’s EM Bypass, rental value appreciation was 51 per cent, while capital values rose by just 19 per cent in this period. In Rajarhat, rental values grew by 37 per cent while capital appreciation was 32 per cent.
• Chennai’s Pallavaram recorded rental values growth of 44 per cent, while capital values rose by 21 per cent. in Perambur, rental values grew by 36 per cent while capital values rose 23 per cent.

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.

“More than ever, investors must align their strategy along very location-specific lines,” says Puri. “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.”