Mumbai, Jun 18 (IANS): A surge in housing supply resulted in a nearly 50 per cent drop in rental price growth in top cities in the second quarter this year (to date) -- registering a 2-4 per cent quarterly rise which is down from 4-9 per cent in the first quarter this year, a report showed on Tuesday.

With more new supply entering the markets, a highly speculative residential rental spike is coming to a halt, according to the latest Anarock data.

The top seven cities are set to deliver nearly 5.31 lakh new units in 2024 while in 2023, these cities saw about 4.35 lakh units being delivered.

This denotes a 22 per cent annual supply increase this year if delivery schedules remain on track.

“In India, the second quarter of most years typically sees rents increase more than in other quarters due to the commencement of the new academic year and the employment of new staff," said Santhosh Kumar, Vice Chairman, Anarock Group.

This year, declining rental value growth coincides with substantial new housing supply entering these markets, he added.

Average rents for a standard 1,000 sq feet 2-BHK accommodation in Bengaluru’s Whitefield rose by 4 per cent in Q2 -- from Rs 32,500 a month in Q1 to Rs 35,000 a month in Q2 (to date).

In Q1 2024, the quarterly jump against Q4 2023 was doubled at 8 per cent for the same flat in Bengaluru.

In Noida Sector 150, the average rent rose by a mere 4 per cent -- from about Rs 24,000 per month in Q1 to approximately Rs 25,000 a month in the current quarter. The quarterly hike stood at 9 per cent in Q1 against Q4 2023.

Sohna Road in Gurugram and Dwarka in Delhi saw their respective quarterly rents increase by 3 per cent and 2 per cent in Q2 2024; in Q1 2024, the hikes stood at 4 per cent and 6 per cent, respectively, the report showed.

Mumbai Metropolitan Region’s (MMR) key markets Chembur and Mulund saw average rents rise by just 2 per cent against the preceding quarter (Q1 2024). In Q1 2024, they rose by over 4 per cent against Q4 2023.