New Delhi, March 1 (IANS): The growth rate of rentals in the top seven luxury housing markets of the country rose by 17-26 per cent in the past seven years, surpassing the rise in luxury property prices in the same localities during the same period, with average capital prices increasing by 15 per cent, according to an Anarock report.

Among the top seven cities, Hyderabad's HITECH City saw the highest rental appreciation (26 per cent during 2014-2020 and in the same period, average price growth was 12 per cent.

Bengaluru's Rajajinagar saw the highest capital price appreciation (15 per cent) while average rentals rose 22 per cent, showed the report.

On the other hand, Gurugram's Golf Course Road saw capital prices decline marginally in this period, while average rentals rose 17 per cent and the average prices in the area currently are at Rs 13,150 per square feet, rentals are at Rs 70,000 per month.

It noted that 2020 was an outlier year for all rental markets with almost no change in monthly rentals compared to the preceding year.

Anuj Puri, Chairman of Anarock Property Consultants said: "The average rentals for a house of minimum 2,000 square feet size in the top seven cities' key luxury hotspots rose anywhere between 17 per cent to 26 per cent in 2020, as compared to 2014. In the same period, average capital prices in these micro-markets saw a maximum rise of 15 per cent, and some even saw a marginal dip."

Citing Anarock data, Puri said also reveals that from 2014 to 2020, rental prices in the top luxury markets saw consistent year-on-year growth, averaging between 3-6 per cent annually.

"In contrast, capital appreciation in this period either remained range-bound or varied each year. Some years saw a decent yearly rise, even as high as 7 per cent, while prices dropped by around 5 per cent in other years, particularly in 2017, when many micro-markets saw capital prices plunge against the preceding year."

In 2017, various structural reforms like RERA and GST were implemented. After this period, most localities only saw a marginal capital price rise averaging between 1-3 per cent, while rental markets continued their growth run.

Due to the pandemic, 2020 was an outlier year for Indian rental markets, with most luxury localities recording either no change in average monthly rentals (compared to the preceding year) or seeing some decline. Without a doubt, COVID-19 impacted luxury rental markets amidst the growing WFH culture. Average property prices showed little or no change in 2020 over 2019.

As per the report, the luxury residential rental market saw a setback due to COVID-19, but now appears to have recovered with demand for rental luxury properties back almost to pre-COVID levels, said the report, adding that monthly rentals in some of the localities have begun heading north.