BENGALURU: The house rent market in Bengaluru which has enjoyed inflated pricing in the recent years, primarily riding on the affordability and demand from the IT sector, is now witnessing a slump following job cuts.
Residential rents are coming down by up to 10 per cent, with at least Rs 3,000-4,000 drop in rentals for a 2BHK, according to real estate agents in the city. The trend is likely to continue until the stress in the IT sector eases out, agents said.
Two-bedroom houses in Marathahalli and Whitefield which were six months ago being rented out for anywhere between Rs 30,000 and Rs 32,000, have now come down to Rs 26,000-28,000, said Amit Kumar Gupta who runs Offbeat Realty in the city. Giving the instance of a property in Yelahanka, he added, “The rent that was in circulation at this place was Rs 31,000. Since there were no takers, we finally closed it for Rs 28,000 including maintenance.”
Realtors say the current crisis in the IT sector may have much to do with this. With the IT sector cutting down on hiring, the number of people freshly migrating to the city has come down, creating a lot of vacant homes. Also, companies have given little or no hikes and increments to employees, which has hit the affordability quotient.
They further said, while earlier if a house owner quoted Rs 20,000 for a 2 BHK, there would be three or four people in line to take up the house at that price. If someone was eager to occupy it immediately, they would even offer to pay a thousand more. However today, people are negotiating for lesser price and are willing to pay only the minimum amount.
“The rents have come down by 10-12 per cent and this trend is likely to continue for some more time,” said Sajid, manager, residential sales and marketing, Silverline Realty Pvt Ltd.
According to Akshay Dewani, director, Assetz Property Group, even property sales have taken a hit. “The industry as a whole might witness a dip in the mid-premium segment considering majority of the buyers for these projects are IT professionals.
Having said that, at present there hasn’t been any direct effect on our sales. If the situation worsens, there are chances the market size will shrink, and the only way real estate developers can overcome this phase is with superior products and intelligent pricing. If one doesn’t, then we could be staring at a huge unsold inventory, which in turn is also not good for the industry as it may lead to deep discounts, impacting the margins of the industry.”