Average Rental Yield for Residential Property in India (2026): City-by-City Data
Rental yield is the number that quietly decides most rent-versus-buy arguments in India, and it is lower than almost everyone expects. Across the major cities in 2026, residential yields sit between roughly 2% and 4%, well below a fixed deposit. That single fact shapes whether a home is a sound purchase or a better rent.
This page collects the current figures city by city, explains why two reputable sources can quote very different numbers for the same city, and shows what a low yield does, and does not, tell you about renting or buying. Every figure here is sourced and dated; you can run your own on the Property Investment Calculator.
What rental yield means, and how to work it out
Rental yield is the annual rent a property earns expressed as a percentage of its price. Gross yield is the raw ratio; net yield subtracts the costs of holding the property.
Gross rental yield = (annual rent ÷ property price) × 100.
Take a ₹1.2 crore two-bedroom flat in Bengaluru let at ₹32,000 a month. The annual rent is ₹3,84,000, so the gross yield is 3,84,000 ÷ 1,20,00,000 = 3.2%. Turn that ratio upside down and you get the price-to-rent ratio: ₹1.2 crore buys about 31 years of rent. Both describe the same relationship, one as a yearly return, the other as a payback horizon.
Net rental yield takes off what a landlord actually spends: society maintenance, property tax, insurance, repairs, and the weeks the flat sits empty between tenants. Those typically shave 0.5 to 1.0 percentage points off the gross figure, so the 3.2% above is nearer 2.3% to 2.7% in the hand. Count the brokerage and repainting that each new tenancy brings and the drag runs past a full percentage point. If you are weighing a property as an investment, the True Rental Expense Calculator and the Property Investment Calculator let you model those costs rather than assume them away.
Average rental yield across India's major cities in 2026
The table below brackets each city between two 2026 sources: the Global Property Guide, which measures gross yield on the median flat across one-, two-, and three-bedroom stock, and Cushman & Wakefield, whose figures cover the luxury segment. The spread between them is real and worth understanding, which the next section covers.
| City | Typical gross rental yield, 2026 | Notes |
|---|---|---|
| Delhi | 3.5–5.8% | Highest among the metros on median stock; Gurgaon luxury nearer 3.0–3.5% |
| Kolkata | ~5.8% | Low prices lift the ratio |
| Bengaluru | 3.0–4.1% | Deep IT rental demand; some outer areas higher |
| Hyderabad | 3.0–4.1% | Up to ~6% in prime pockets like Gachibowli and HITEC City |
| Pune | 3.0–3.4% | Steady, education- and tech-led demand |
| Chennai | 2.8–3.2% | OMR IT corridor drives the rental market |
| Mumbai | 2.0–3.8% | Highest prices in the country pull yields to the bottom |
Sources: Global Property Guide, gross yields, Q2 2026 (national average 5.16%); Cushman & Wakefield Q3 2026 luxury-segment figures via Sobha; city-level detail from Business Standard, NoBroker, and Housing.com listings. Figures are gross and indicative; net yields run lower.
Those are the metros, and they are the weakest end of the market on yield. Smaller cities do considerably better: rental yields in India's tier-2 cities such as Indore, Jaipur, and Coimbatore run 4% to 6% gross, because prices there are far lower relative to rent.
Why the same city shows two different yields
The Global Property Guide puts Mumbai at 3.84% while Cushman & Wakefield reports 2.0–2.6%. Both are correct; they are measuring different things. The same spread runs inside a single city: Mumbai's rents and yields area by area range from about 2% to 2.5% in South Mumbai to 4% to 7% in Thane.
- Median versus luxury: a median-across-all-stock figure includes cheaper, smaller flats that earn proportionally more rent, so it reads higher. A luxury-only figure divides high rents by even higher prices, so it reads lower.
- Gross versus net: a gross figure ignores maintenance, tax, and vacancy; a net figure counts them. Always check which one a headline number is.
- Prime pockets versus city average: HSR Layout in Bengaluru or Gachibowli in Hyderabad can top 6%, well above the city as a whole. A single-area yield is not the city's yield: Bangalore's yields area by area range from about 3% in Indiranagar to 7.3% in HSR Sector 3, against a city figure of 3% to 4%.
The practical lesson: never compare a yield from one source against a yield from another without checking the method. Compare like with like, or compute your own from a specific flat's rent and price.
What counts as a good rental yield in India?
By global standards, Indian residential yields are low. Many mature markets clear 4% to 6% gross; India's metros mostly do not. So on the return from rent alone, a 3% yield trails a fixed deposit paying 6.5% to 7%, and it trails what an index fund has historically returned over long periods (10–12%, with the usual caveat that past returns are not promised). For the benchmark in full, band by band, see what counts as a good rental yield in India.
That does not make buying a poor decision, and here both sides deserve equal weight:
- The case a low yield supports: yield is only the rental slice of a homeowner's return. Price appreciation and the leverage of a home loan can add to it, and a self-occupied home also removes rent from your budget entirely. A 3% yield with 7% appreciation is a different proposition from 3% alone.
- The case a low yield strengthens for renting: when a flat yields 2.5%, renting it costs you far less each year than owning it, and the large sum you did not spend on a down payment can be invested elsewhere. The lower the yield, the wider that gap tends to be.
Neither reading wins on the yield number by itself. It depends on your holding period, the price growth you actually expect, and what you would earn on the money you free up by renting. That is the arithmetic the Rent vs Buy Calculator is built to run.
What low yields mean if you are deciding to rent or buy
A low rental yield is the market telling you that homes here are expensive relative to what they earn in rent. For a would-be buyer, it raises the bar that appreciation has to clear to make ownership pay. For a renter, it means you are occupying an asset for a yearly cost well below its price, which is a genuine advantage as long as you invest the difference rather than spend it. For how that plays out market by market, our 2026 rent versus buy guide to six Indian cities sets the yields alongside prices, rents, and appreciation.
So treat the city figures above as a starting point, not a verdict. Plug your own flat's rent and price into the Property Investment Calculator to see its gross and net yield for that specific property, then compare owning it against renting it and investing the gap over your real time horizon.
Rental yield questions, answered
What is the average rental yield in India in 2026?
Gross residential rental yields run about 2% to 4% across most major cities in 2026, with cheaper markets like Delhi and Kolkata higher on median stock and Mumbai the lowest because of its prices. The Global Property Guide puts the national average at 5.16% on median-flat gross terms; segment- and area-specific figures vary widely.
Is a 3% rental yield good in India?
For an Indian metro it is about average, and it is below a fixed deposit, so 3% is not compelling on rental income alone. Whether it is "good" depends on the price appreciation you expect and how long you hold the property, since those add to the total return that yield only partly measures.
Which Indian city has the highest rental yield?
On median-stock gross terms, Delhi and Kolkata lead among the large cities, both near 5.8% in 2026. That Delhi figure carries a caveat: the premium Gurgaon and Noida corridors most buyers actually shop in run at 3% to 4.5%, not 5.8%. Among the southern tech hubs, Bengaluru and Hyderabad sit around 3% to 4%, with individual prime areas going higher. Mumbai is consistently the lowest of the metros.
What is the difference between gross and net rental yield?
Gross yield is annual rent divided by price. Net yield subtracts the costs of owning the flat: maintenance, property tax, insurance, repairs, and vacancy between tenants. Net is usually 0.5 to 1.0 percentage points below gross on those costs alone, and more once the brokerage and repainting between tenancies are counted. It is the figure that reflects what a landlord actually keeps.
How do I calculate rental yield for my own flat?
Multiply the monthly rent by 12, divide by the property's price, and multiply by 100 for the gross yield. For the net figure, subtract your yearly maintenance, tax, insurance, and an allowance for vacant weeks from the annual rent first. The rental yield calculator does both from one flat's rent, price, and running costs, including the brokerage and repainting between tenants.