A building under construction, ahead of the presentation of the Union Budget 2024-25 by Union Finance Minister Nirmala Sitharaman,.
Credit: PTI photo
Indian urban real estate is currently the most buoyant sector, with high investment and high return opportunities.
Real estate developments are reaching and refining some of the cities’ most unexpected and desolate areas. Multiple locations in the suburban areas are witnessing a rise in return rates with infrastructure development.
New property investments in cities like Bangalore, Mumbai, Pune, and Ahmedabad are giving 2x-2.5x returns. Its subsidiary, the property rental market, is also scaling as quickly as the buy/sell market and is showing high returns. Credit is due to the tier 1 cities attracting higher-income professionals with considerable disposable margins and intent to spend to get convenient locations. In fact, for anyone thinking of investing in a property and leasing it for rent, this might be a great time.
For owners, this means evaluating their estate’s worth and deciding whether to sell their old properties to invest in newer projects or hold onto them for higher anticipatory returns and higher rental profits.
Metrics to evaluate
Owners often overlook how much their real estate could have depreciated. However, mapping the property score and knowing its market value are essential for maximum returns. Here are some aspects you can check to determine the valuation of your property.
Property type: Gated societies are in demand. They are much more secure and easier to manage while offering residents convenience, the best amenities, and exclusivity. If your property is a standalone estate and you are not witnessing any growth in its rate, then maybe you’d want to consider selling. However, if a new project launch or infrastructural growth is nearby, you should hold it for potential appreciation.
Maximum potential: Every type of property, whether residential or commercial, reaches its maximum appreciated value at one point. This could be due to too little development in the nearby area. If there is rapid infrastructural development like malls, metros, and commercial parks nearby, you should hold on to the property as it can give higher rental returns. But if your property has hit the market cap, it’s best to sell it off and invest in a property that holds scope for appreciation in the future.
Age of the property: If the property is over 10-15 years old, there will likely be no further appreciation as new projects with newer and more amenities will fetch higher returns. If your property is older than 15, it would be wise to sell it and invest in a new project where rentals will be better, and there is scope for appreciation during resale.
Cities giving highest investment & rental returns in 2025
Below is a city specific understanding of what returns your property can fetch you. If you have a property in one of these cities, then this information can help you make an informed decision regarding whether you should hold on to it or to sell it and invest in a new one.
Bangalore: Bangalore saw a massive increase in the real estate market valuation, whether for resale properties or primary gated projects. Bangalore estate has given excellent returns over the past 4 years. The city is also undergoing a massive urban expansion, benefiting old and new property owners. The average price per sq ft in Bangalore saw a 16% year-on-year (YoY) increase and surged to Rs 9,225(2024). The price of newly launched projects is slated to increase further as projects near possession. The average rent for a 2BHK in a gated society in the city ranges from Rs 22,000 – Rs 35,000.
Pune: Pune has always been an educational hub, but is now growing as an IT hub. Affordable housing (<Rs 40 lakh) rose in 2024, holding 45% of the market demand. Luxury housing (>Rs 1.5 crore) also saw a 7% price growth. With many new projects launching in the city, the average price per sq ft is ₹7,499. Average rents for a 2BHK range from ₹17,500 – ₹25,000. However, Pune also saw a rise in resale property valuation, with ready-to-move-in properties selling faster due to immediate move-ins. Baner, Hinjewadi, and Pimpri-Chinchwad are some of the prime areas where land rates are expected to increase further and can benefit those who hold on for a while.
Hyderabad: The demand for Hyderabad’s estate dipped in 2024 but recovered in the year’s second half because of the thriving IT culture. Despite this, the premium properties (Rs 80 lakh - Rs 1.5 crore) held the most significant market share. The resale properties followed the same pattern and witnessed a 15% price growth over 2023. Hyderabad is also one of the few tier 1 cities that saw a boost in standalone property prices. The average price per sq ft is Rs 8,197. Depending on the locality and the house type, you can expect rent between Rs 14,000 and Rs 28,000 for 2BHK.
Delhi NCR: Delhi NCR has shown the highest price per sq ft rate increase in 2024. Post-COVID, Noida and Gurgaon both developed at breakneck speeds. With the growing connectivity to commercial hubs and infra-development, Noida and Gurgaon are among the top investment choices in India. And with ready-to-move-in/resale properties appreciating over 30%, investors are already reaping profits they never imagined. In Noida, the average price per sq ft is Rs 10,313, which has surged by 26% since 2023. The expected rentals can be between Rs 18,000- Rs 35,000 for a 2BHK. Gurugaon’s average price per sq ft in 2023 was Rs 11,14,4, which rose by 20% in 2024 to Rs 15,159. Property owners can expect the rents to range from Rs 30,000- Rs 45,000 for a 2BHK. The top locations to invest in Noida and Gurgaon are Noida Expressway, Sector 14-15 and New Gurgaon, Golf Course Extension.
Chennai: Chennai witnessed a high demand and low supply situation in 2024. The mid-end housing (Rs 40 lakh - Rs 80 lakh) and the high-end housing (Rs 80 lakh - Rs 1.5 crore) dominated the market demand. The average price per sq ft went up 25% to Rs 11,443. The average rent for a 2 BHK ranged between Rs 12,000 - Rs 23,000. Velachery, Ambattur, and Madipakkam are the top localities that give maximum returns on the estate.
Real estate market trends are shifting every month. The buyers are now moving from affordable to luxury housing schemes. This applies to the tenants as well. So, if you want to yield the maximum return on your estate, this might be a perfect time to evaluate its value and sell or renovate to get the highest rental rate in the market. Various platforms have property experts who can help you gauge the market and ensure you get good returns. Such platforms offer a one-stop solution to learn about the primary projects or explore the resale market.
(The author is Cofounder and Chief Product & Technology Officer, NoBroker)