Major Indian Cities Witness 25% Rent Hike in 2025, Trend Expected to Continue
Residential property rents in key Indian metropolitan areas, including Mumbai, Delhi, Bengaluru, Noida, and Gurugram, experienced a significant surge of 25 percent in 2025. This sharp increase is attributed to a combination of factors, including escalating property prices, corporate mandates for employees to return to physical offices, an influx of affluent newcomers, and robust demand for business rentals. The situation has forced many workers to relocate to distant suburbs in search of more affordable housing options, highlighting growing affordability concerns.
Expert Predictions Point to Sustained Growth in 2026
Industry analysts anticipate that this upward trajectory will persist into 2026. Shveta Jain, Managing Director of Residential Services at Savills India, emphasized this outlook, stating, "We expect rentals to remain on an upward trajectory, with more growth concentrated towards established corridors, while affordability pressures may push incremental demand towards peripheral locations." This suggests that while prime areas will continue to see high demand, cost-conscious tenants will increasingly look to outlying regions.
City-Specific Breakdown of Rental Increases
The rent surge manifested differently across cities, reflecting local market dynamics:
- Mumbai: Prime localities in the financial capital witnessed rent increases ranging from 1 to 20 percent. This was driven by tenant preferences for larger homes with superior amenities and the redevelopment of older buildings, which reduced available inventory and pushed prices higher.
- Gurugram: Luxury residential segments in this National Capital Region hub saw hikes between 8 and 25 percent. Areas such as Dwarka Expressway and Golf Course Road led with jumps of 25 percent and 20 percent, respectively, due to their proximity to corporate offices.
- Bengaluru: Rents in the tech hub climbed by 18 to 20 percent, fueled by returning IT professionals and an increasing number of expatriates seeking housing.
- Noida: The expressway corridor experienced a 19 percent rise in rents compared to 2024, even as new luxury home launches declined by 17 percent, indicating tight supply.
- Delhi: Despite real estate development focusing on Noida and Gurugram, Delhi's overall rents rose by 19 percent, with South-East and South-Central areas recording the highest increases. Pradeep Prajapati from Wealthvisory Capital noted, "Delhi often beats them in rentals because of lack of availability," underscoring the capital's unique supply constraints.
Luxury vs. Mid-Segment: A Growing Divide
The rental market is increasingly bifurcated. Shauzab Kazmi from Moneytree Realty explained, "Top executives prefer to stay near the office, and that is the reason why luxury rentals continue to go up, as these complexes are located near office hubs. Mid-segment employees have to move to peripheral areas to save on rent, though there, too, there has been a substantial increase in rentals." This trend is exacerbated by properties near metro stations becoming significantly more expensive, further squeezing affordability for average earners.
As 2026 approaches, the Indian rental market faces continued pressure from economic and demographic factors, with affordability remaining a critical challenge for urban residents.
