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Robust Rise in Home Rentals in Bangalore

Torbit - November 13, 2022 - - 0 |
Robust Rise in Home Rentals in Bangalore

Driven by the demand-supply mismatch and tenants preference for gated residential socities because of the safety and security they offer, rentals across Bangalore’s gated communities are on rise in the post-pandemic time.

  According to NoBroker.com, India’s first proptech unicorn, home rentals in gated communities across Bengaluru are  increasing by 15% to 40%. The price increase has been triggered by the high demand for apartments in gated residential societies.In areas like Bellandur ,Sarjapur Main Road ,  apartment owners in gated residential complexes are pleasantly surprised that their apartments are getting rented out within hours of listing, commanding  20-25 percent higher rent.

Past two years saw rapid urbanization in IT cities such as Bangalore and Pune. Students who graduated during the two years of Covid entered the job market wherein they joined the workforce but were working from home. Now, as offices have opened up, they are relocating to their work cities. Also, professionals who were working in these cities had gone back to their hometowns due to prolonged work from home and are now back. A lot of start-ups in Bangalore have increased headcount of employees during the pandemic years. These professionals too are moving to Bangalore as work from home is discontinued. While there is sudden demand from these three segments, the supply has not kept pace as construction activity was muted for almost two years.

According to  Amit Kumar Agarwal, CEO and Co- founder, NoBroker.com , the fresh  overwhelming demand for apartments in gated communities in Bengaluru has come from professionals freshly out of college, professionals relocating from other cities to Bangalore, and professionals who had moved to their hometowns due to prolonged work from home and are now flocking back to Bangalore. Gated societies have always been a preferred choice for most people due to the conveniences they offer. But given the fact that construction activity came to a grinding halt during Covid, the supply of new constructions has not matched up to the demand. Traditionally, rents increase by 7-8% in a year. But this year they have increased from anywhere between 15-40%.”

Listings in gated societies are in such high demand on the platform that almost all properties get rented out within 5-6 hours, especially those located in East Bengaluru or close to the IT corridor. In Adarsh Palm Retreat, Bellandur, for instance, 3 BHK apartments with monthly rent in the range of INR 45,000-55,000 in 2021 are now attracting monthly rents of INR 65,000-75,000. Similarly, 2 BHK apartments in another gated society, Raheja Residency, in Koramangala are now attracting a monthly rent of INR 50,000-55,000, as opposed to the INR 35,000-40,000 that they fetched just a year ago.The average rental yield for such properties along areas such as the Outer Ring Road and Sarjapur Main Road has also registered a significant increase, growing to 4-5% as compared to the 2-3% that they secured before the pandemic.

What is most interesting about this trend, according to Agarwal,  is that it is not a localised phenomenon but one that is playing out across all major cities in India. More and more urban residents now value their living experience over other considerations such as affordability.

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