India's rental housing market has witnessed a substantial surge in recent years. In 2024, the market was valued at USD 20.31 billion and is projected to grow to USD 26.78 billion by 2030, expanding at a CAGR of 4.56% during the forecast period. This growth highlights the increasing reliance on rental housing as a flexible and convenient option for urban dwellers, students, and professionals.

The rental housing market encompasses various property types, including apartments, independent houses, PG accommodations, and co-living spaces. It plays a crucial role in providing housing and renting solutions for individuals and families who may not be ready or able to purchase a home. 

Multiple factors, such as economic conditions, population growth, and infrastructural developments in metropolitan areas, influence the market's expansion. The demand for rental homes is particularly strong in cities with thriving job markets, reputed educational institutions, and growing commercial hubs.

In this blog, we’ll break down the average rent in India for 2025, covering 1BHK, 2BHK, and 3BHK apartments, PG trends, and city-wise rental increases to help tenants and landlords stay informed.

Significant Growth in Rents Across Major Cities

The Indian rental housing market has shown consistent growth due to urbanisation, migration, and economic opportunities. The increasing cost of homeownership and the growing number of nuclear families have also contributed to rising rental demand. It consists of a diverse range of residential properties, including:

• Apartments

• Single-family homes

• Shared housing arrangements (PGs and co-living spaces)

Key stakeholders in the market include property owners, tenants, real estate agencies, and property management firms. The demand for rental properties is particularly high in urban centres due to the growing job market, better infrastructure, and improved living standards. Additionally, India's expanding middle class and increasing mobility among professionals have further boosted the rental housing market.

One of the major advantages of renting a home is flexibility. Tenants can relocate easily without the financial burden of long-term homeownership. Furthermore, renting requires lower upfront costs compared to purchasing a house, making it a viable option for young professionals, students, and working-class individuals. Since landlords typically handle property maintenance and repairs, tenants can enjoy hassle-free living.

The Indian rental housing market is driven by several factors, including:

• Urbanisation: With more people moving to cities, the demand for rental properties continues to rise.

• Economic growth: Employment opportunities in major metro cities increase rental demand.

• Housing affordability: Buying property is becoming more expensive, making renting a practical alternative.

• Infrastructure development: Improved connectivity, public transport, and amenities attract more tenants.

As the rental housing market expands, it is expected that cities with growing economies and robust infrastructure will continue to experience an upward trend in rental rates.

Average Rent Across Different Property Types

Rental prices in India vary significantly based on property type, location, and amenities offered. Below is a breakdown of the average rent for different property types in urban areas:

1. Room Kitchen (1RK)

A 1RK apartment is ideal for single occupants, students, or individuals looking for affordable housing options. These units are compact and typically include a single room with an attached kitchen and bathroom.

• City Centre: ₹10,000 - ₹15,000 per month

• Outside City Centre: ₹6,000 - ₹10,000 per month

These units are most commonly found in metro cities like Mumbai, Delhi, and Bengaluru, where demand for budget-friendly rental options remains high.

2. Bedroom-Hall-Kitchen (1BHK)

A 1BHK apartment is suitable for young professionals, couples, or small families. It provides more space than a 1RK and includes a separate bedroom, living area, and kitchen.

• City Centre: ₹16,290 per month

• Outside City Centre: ₹10,211 per month

Prime areas in Mumbai, Gurgaon, and Bangalore often see higher rental costs due to proximity to business hubs and metro connectivity.

3. Bedroom-Hall-Kitchen (2BHK)

A 2BHK apartment is popular among families and working professionals who require extra living space. These apartments often come with additional amenities like balconies, security services, and parking.

• City Centre: ₹25,000 - ₹35,000 per month

• Outside City Centre: ₹15,000 - ₹25,000 per month

In cities like Hyderabad, Pune, and Chennai, 2BHK apartments remain a preferred choice for families due to their affordability compared to metro hubs like Delhi and Mumbai.

4. Bedroom-Hall-Kitchen (3BHK)

A 3BHK apartment is ideal for larger families or individuals looking for spacious living. These properties often include multiple bathrooms and additional facilities like clubhouses, parking, and gyms.

• City Centre: ₹37,354 per month

• Outside City Centre: ₹23,181 per month

In high-end locations like South Mumbai, Gurgaon, and Whitefield (Bangalore), rental prices are significantly higher due to premium facilities and demand from corporate professionals.

Rental costs also fluctuate based on factors like locality, demand, accessibility to transportation, and nearby amenities such as schools, hospitals, and shopping complexes. Premium residential areas and metropolitan hubs like Mumbai, Delhi, Bengaluru, and Hyderabad tend to have higher rental prices compared to tier-2 and tier-3 cities.

With the steady rise in housing demand and infrastructural growth, rental rates in major cities are expected to witness further increments in 2025. Renters should consider various factors, such as proximity to workplaces, connectivity, and community facilities while choosing rental accommodations.

Paying Guest (PG) Accommodations

PG accommodations are a popular choice for students, working professionals, and those looking for cost-effective rental options. A study by Magicbricks found that rent for double-sharing PG accommodations is 33% lower than single-occupancy rooms, while triple-sharing options are 44% cheaper.

Across India, PG rents generally range between ₹4,800 and ₹15,200 per month, depending on the number of occupants per room:

• Triple-sharing rooms: ₹4,800 - ₹7,700 per month

• Double-sharing rooms: ₹6,800 - ₹10,000 per month

• Single-occupancy rooms: ₹6,800 - ₹15,200 per month

Among major cities, Mumbai has the highest PG rents, ranging from ₹7,800 to ₹15,200 per month, while Kolkata offers the lowest, with rents between ₹4,800 and ₹6,800 per month.

These figures highlight how PG accommodation costs vary across different cities, being the most expensive. Factors such as location, amenities, and demand play a crucial role in determining PG rental prices.

Rent Increases in Major Indian Cities

The rental market in India has seen a significant surge over the past five years. According to a report, the average rent for a standard two-bedroom house spans 1,000 square feet in seven major Indian cities. It has been surged by up to 64% since 2019. Several cities have experienced notable rent hikes due to increased demand, infrastructure development, and market dynamics.

Rent Growth in Key Areas

Sector 150, Noida

Sector 150 in Noida has seen one of the highest rent increases in India. The average rent has jumped from ₹15,500 in 2019 to ₹25,000 in 2024, marking a 63.3% rise. This surge is driven by the rapid development of infrastructure, proximity to major commercial hubs, and increasing demand for premium residential properties. The Noida-Greater Noida Expressway and upcoming metro connectivity have further boosted the desirability of this region.

Dwarka, Delhi

Dwarka, a well-planned residential area in southwestern Delhi, has experienced a 43.5% hike in rental costs. The average rent has increased from ₹19,500 in 2019 to ₹28,000 in 2024. Dwarka's strong connectivity via the Delhi Metro, its strategic location near the airport, and improvements in civic amenities have contributed to this increase. The locality is preferred by working professionals, government employees, and students, further driving up rental demand.

Chembur and Mulund, Mumbai

In the Mumbai Metropolitan Region (MMR), Chembur has recorded the highest average rent increase for a two-bedroom apartment. The rent has gone up from ₹45,000 in 2019 to ₹63,500 in 2024, reflecting a 41.1% rise. Chembur's strategic location, improved connectivity through the Eastern Freeway, and proximity to business hubs have made it a sought-after residential area.

Mulund, another prominent suburb in northwest Mumbai, has seen its average rent rise from ₹38,600 in 2019 to ₹49,700 in 2024, marking a 28.7% increase. The presence of commercial hubs, better road infrastructure, and access to high-quality residential projects have contributed to the steady growth in rental values.

Sarjapur Road, Bengaluru

Sarjapur Road in Bengaluru has experienced a staggering 66.7% increase in rental prices over the past five years. The rent has increased from ₹21,000 in 2019 to ₹35,000 in 2024. This surge can be attributed to the expansion of IT corridors, the presence of leading multinational companies, and the increasing influx of working professionals. The locality's modern amenities, gated communities, and superior infrastructure continue to attract tenants seeking high-quality housing options.

These trends indicate that the Indian rental market is evolving rapidly, with major cities witnessing significant rent hikes due to economic growth, infrastructure improvements, and increased urban migration.

Deceleration in Rent Growth

Despite significant rent increases over the years, the rate of rent growth has begun to slow in many cities. In the second quarter of FY24, rental growth across key micro-markets slowed to 2-4%, compared to a higher 4-9% growth in the first quarter. This suggests that supply is catching up with demand, tempering rental inflation.

Quarterly Rent Growth Comparison

Noida and Delhi

Sector 150 in Noida, which previously saw a 9% rental increase in Q1 FY24, registered a slower 4% growth in Q2. Similarly, Dwarka in Delhi saw its rent growth fall from 6% in the first quarter to 2% in the second. These slowdowns indicate that the rental surge in these regions may have peaked, and additional housing supply is helping to stabilise prices.

Gurgaon and Mumbai

Sohna Road in Gurgaon and Mumbai’s suburbs like Chembur and Mulund have also seen a deceleration in rental increases. Sohna Road recorded a 3% rise in Q2 compared to 4% in Q1, while both Chembur and Mulund saw only a 2% increase, reflecting a market slowdown.

Hyderabad

Hyderabad’s major IT hubs, HITECH City and Gachibowli, which experienced a 5% rent increase in Q1 FY24, saw slower growth at 3% in Q2. The increase in rental properties and shifting tenant demand patterns are helping to ease rental pressures.

The overall moderation in rent growth suggests a stabilising rental market, potentially providing relief to tenants while maintaining healthy returns for property owners.

Also Read: How Much of Your Salary Should You Spend on Rent: A Guide for Tenants

Market Dynamics and Future Supply

Various factors, including the supply of new housing units, market demand, and economic conditions, influence the dynamics of India's rental housing market.

The influx of new housing units is expected to influence rental trends in various ways. In markets where supply outpaces demand, rental rates may experience a correction or slower growth. Conversely, in cities where demand remains robust due to factors like employment opportunities and lifestyle amenities, rents may continue to rise, albeit at a moderated pace.

For example, in Bengaluru, the increase in housing supply has led to a stabilisation of rental rates, with landlords adjusting expectations to align with the competitive market.

Key Factors Driving Market Growth

1. Urban Migration: The continuous influx of individuals into urban centres has heightened the demand for rental properties. Especially in major cities where property prices have escalated by 15–20% since the pre-pandemic period.

2. Limited Ready-to-Move-In Inventory: Only 21% of available housing inventory comprises ready-to-move-in homes, leading to increased rental rates due to the scarcity of immediate housing options.

3. Government Initiatives: Programs like the Affordable Rental Housing Complexes (AHRC) scheme aim to address affordability challenges and support economically weaker sections, thereby influencing the rental market dynamics.

Regional Variations in Rental Costs

Rental costs in India vary significantly across different cities and within urban areas. Metropolitan cities like Mumbai, Delhi, and Bangalore command higher rental rates due to better infrastructure, employment opportunities, and lifestyle amenities. In contrast, Tier-II and Tier-III cities offer more affordable rental options.

Within cities, prime urban areas, often located in city centers or business hubs, have higher rental costs compared to suburban localities. For instance, in Mumbai, areas like South Mumbai and Bandra are more expensive than suburbs like Navi Mumbai or Thane. Similarly, in Delhi, central areas such as Connaught Place and South Extension have higher rents compared to peripheral regions like Rohini or Dwarka.

Overall, the addition of new housing units is likely to provide tenants with more options and potentially temper rental growth. The actual impact will vary based on regional demand-supply dynamics and economic conditions

The Growth of Rental Property Management in India

Despite being in its early stages, rental property management in India is evolving rapidly. The introduction of digital platforms and professional property management firms has attracted developers looking to convert unsold inventory into rental properties. At the same time, co-living spaces are becoming increasingly popular, especially among young professionals, students, and remote workers seeking flexible and community-driven housing options.

As metropolitan cities expand, the demand for rental management services is expected to grow significantly. This trend will particularly benefit:

• Rental homeowners who seek professional management for their properties.

• NRIs and absentee landlords who require hassle-free property maintenance and tenant management.

• Real estate investors who are looking for better rental yield and long-term asset appreciation.

• Tenants who prefer managed properties with better service, security, and maintenance support.

Technology’s Role in Rental Management

The adoption of tech-driven property management solutions has streamlined key processes such as tenant screening, rent collection, and property maintenance. Platforms like Crib offer end-to-end rental management solutions, making it easier for landlords to oversee their properties remotely. With the rise of co-living, these platforms are also catering to shared accommodations, offering seamless management of utilities, security, and community engagement.

As India’s rental market matures, professional property management services will play a crucial role in enhancing tenant experiences, reducing vacancies, and maximising rental returns.

Conclusion

The Indian rental market is growing at an unprecedented pace, supported by favourable government policies, technology-driven solutions, and evolving tenant preferences. The co-living and shared rental space trend is expected to expand, particularly among young professionals seeking affordability and convenience.

Understanding the rental landscape is crucial in finding a home that not only provides shelter but also aligns with lifestyle and budget. With cities like Mumbai, Bangalore, and Hyderabad leading this transformation, 2025 will see a dynamic and well-regulated rental market benefiting both tenants and property owners.

For a seamless rental experience, platforms like Crib are revolutionising the sector by offering secure, transparent, and efficient property management solutions. With automated rent collection, real-time tenant management, and compliance tracking, Crib simplifies property operations. Stay ahead in the evolving rental market—Book a demo today and experience the future of property management! 

Frequently Asked Questions

1. What is the average rent price in India?

The average rent price in India varies by city and property type. A 1BHK apartment in a metro city costs around ₹11,000-₹20,000 per month, while in smaller cities, it ranges between ₹6,000-₹12,000. High-end areas like Mumbai and Delhi have much higher rental prices.

2. What is the average living cost in India?

The average cost of living in India, including rent, is ₹27,265 ($2,620) per month. Expenses vary based on lifestyle, location, and personal spending. Costs are higher in metro cities, while smaller towns offer affordable living. Food and transport can be budget-friendly if you shop locally and use public transport.

3. How much rent should I pay in India?

Rent should ideally be 20-30% of your monthly income. For example, if you earn ₹50,000 per month, a reasonable rent would be around ₹10,000-₹15,000. However, in expensive cities like Mumbai, people often spend up to 40% of their income on rent.

4. What should rent be per salary?

Financial experts suggest that rent should not exceed 30% of your monthly salary. If you earn ₹1,00,000 per month, your rent should ideally be ₹30,000 or lower. Spending more may affect savings and other essential expenses.

5. Which city in India has the highest rent?

Mumbai has the highest rents in India. A 1BHK apartment in central Mumbai costs ₹35,000-₹60,000 per month, while in high-end areas like South Mumbai, it can exceed ₹1 lakh per month. Delhi, Bangalore, and Gurgaon also have high rental costs.

6. Which is the cheapest city in India?

Kochi, Indore, and Bhubaneswar are among the most affordable cities in India. Rent for a 1BHK apartment in these cities is as low as ₹5,000-₹10,000 per month. Living costs, including food and transport, are also much lower compared to metro cities.

7. How much do I need to earn to survive in India?

A single person needs at least ₹25,000-₹40,000 per month to cover rent, food, utilities, and transport in metro cities. In smaller cities, ₹15,000-₹25,000 per month is enough for a decent lifestyle.

8. Which is the costliest city in India?

Mumbai is the most expensive city, followed by Delhi, Bangalore, and Gurgaon. High property prices, expensive dining, and transportation costs make Mumbai the costliest city in India.

9. What is the future of the rental business in India?

The rental market in India is growing due to urbanisation, increasing migration, and demand for co-living spaces. Technology-driven property management platforms are making renting easier for both landlords and tenants. The sector is expected to expand further in the coming years.

10. What is the future of the housing sector in India?

The Indian housing sector is expected to grow due to government policies, smart city initiatives, and rising demand for affordable housing. The focus is shifting toward sustainable and smart homes, especially in urban areas.

11. How do you do a market analysis for rent?

Rental market analysis includes the following:

• Comparing rental prices of similar properties in the area.

• Checking demand and supply trends.

• Assessing location advantages like proximity to offices, schools, and transport.

• Studying economic factors like job growth and inflation.

12. Is rental income profitable in India?

Yes, rental income is profitable, especially in high-demand cities like Mumbai, Bangalore, and Pune. However, rental yields (returns on investment) are 2-4% annually, which is lower than other investments. Properties in prime locations offer better rental income and long-term appreciation.