Bengaluru

‘To-let’ boards become common as WFH, job loss keep tenants away

Many houses and flats are vacant as tenants have returned to their hometowns.   | Photo Credit: Bhagya Prakash K

Shoaib Khan had always viewed his flat in central Bengaluru as an investment. After having to relocate to Mysuru, he rented out the flat. But as COVID-19 struck, leading to job loss and pay cut, his tenant requested him to lower the rent, which he did by ₹6,000. However, as work from home continued, in September, the tenant decided to head back to his hometown in a neighbouring State. The flat has been vacant since then, though Mr. Khan has put out ads on real estate portals with a rent amount much lower than earlier.

Once booming, the rental real estate business in Bengaluru is now characterised by ‘to-let’ boards across many residential areas. Online real estate forums as well as “no-broker” platforms are seeing a substantially high quantum of ad postings for vacant rental properties while real estate agencies are also reporting the same.

According to 99acres, the movement of residential rental listings in Bengaluru on the portal has seen a year-on-year growth of 19%. “If we need to take a look at the impact on rental values (ask price), then we will have to look at a locality level since different localities have behaved differently,” Maneesh Upadhaya, Chief Business Officer, 99acres.co, told The Hindu.

According to the platform, Rajajinagar, which has 35% to 46% market share in the 2BHK and 3BHK segments, has had the highest change in year-on-year rental asks (9%). Whitefield, on the other hand, with 40% to 35% (2BHK and 3BHK) has had no change.

G. Dinesh Poojary from S.R. Real Estate, said the trend began almost as soon as he COVID-19 outbreak and subsequent lockdown was announced. “Work from home was declared for most companies and many even lost jobs. In fact, even those from within Karnataka, who were working in Bengaluru, went back to their hometowns as paying rent and arranging for food became a problem,” he said.

The sudden slump has also had an impact on the rent amounts, with demands for lower rents also being seen on social media platforms. In fact, owner postings that quote “pre-COVID-19” rent amounts are attracting trolls.

“Some owners are now reducing the rent amount by around 20% because it is better than leaving it empty. For example, those who were charging ₹15,000 are reducing it to ₹10,000. We expect the situation to improve only once work from home is cancelled. But once the market improves, the rent will certainly increase,” Mr. Poojari said.

Not just lower rent, some tenants are also looking at the current scenario as an opportunity to upgrade to better rental accommodation with their present budget.

Sunil Singh from the firm Realty Corp said the number of vacant rentals had definitely increased, but so have enquiries. “The number of enquiries has increased since a month or so. But now, the tenant-side scenario is that they are expecting a good deal. If they were paying ₹40,000 for a 2 BHK, they are now looking for a 3 BHK in the same budget,” he explained.

Rentals are down across segments, he said, adding that property owners understand. “To an extent, they are willing to negotiate depending on the client profile. Once a vaccine is ready, and people return to their desks, things will change,” he said.

Unable to maintain properties they had invested in, some of them exclusively to rent out, some owners are also looking at selling such properties. “Around 10% owners are selling properties. On the other hand, some tenants are also looking at this as an opportunity to buy,” Mr. Singh added.

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Printable version | Jan 20, 2021 10:42:29 AM | https://www.thehindu.com/news/cities/bangalore/to-let-boards-become-common-as-wfh-job-loss-keep-tenants-away/article33234669.ece

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