With fewer tenants in town, rents fall

With fewer tenants in town, rents fall

Encouraged by more affordable rents, some tenants are moving to posher homes

Many house owners are reducing their rents as tenants vacate and more to their hometowns. 

The lower rents are encouraging some tenants to move up the luxury ladder: they now pay the same rents and live in posher homes.

When automation tester engineer Bryan Jacob approached a real estate agent, he got to know rents were more affordable now.

“The agent told me that a semi-luxurious 2-BHK apartment in HSR was available for less than Rs 20,000. An apartment in a gated community is now available for under Rs 25,000, at rents unimaginable earlier,” he says. 

Shyam (name changed) is giving out his 3 BHK apartment in Prestige Shantiniketan, Whitefield, for Rs 40,000 a month. It used to fetch him Rs 50,000 earlier. He says, “People don’t want to pay as much as before. When I didn’t find a tenant for two months, I decided to lower the rent,” he says.

MNC employee Radha Vallabh moved to Bengaluru last year for work. In March this year, just before the long lockdowns were announced, he decided to go home for a few weeks and come back when things had settled down.

The lockdown continued a lot longer than anticipated and he saw no reason to come back as his company has announced work from home till June 2021. He had been paying rent for his Bengaluru home though.

“I never thought of asking the owner to lower the rent till September. But when I found out that we would be working from home till next year, I decided to clear out my things instead of paying Rs 15,000 as rent,” Vallabh says. Also, the owner refused to lower the rent. Vallabh has hired storage space at Rs 2,500 a month. 

Similarly, many others are moving out of the city to their hometowns and saving on rent. 

Not all owners are bringing down the rents, though. Madhurima Bhattacharjee, owner of two homes in Cambridge Layout (GR Maithri) and Kudlu Gate (Salarpuria Cadenza Apartments), had to find new tenants. “The Kudlu Gate property is just a year old. It’s in a gated community, so the rent is around Rs 35,000. Almost everyone who approached us expected us to lower the rent but we decided not to. We now have new tenants for both our properties,” she says. 

Families moving in

Rahil Mohammad, owner of Homestead India, a property management company, explains, “Owners are worried that bachelors won’t be returning anytime soon. So they are compromising on the rent and families are taking advantage of it.”

He recalls an incident where a family living in a standalone property learnt that homes in good gated communities were going cheap.

“The new homes were given out for Rs 40,000 to Rs 45,000 a month. But because of most people vacating, the owners have come down to Rs 25,000 to Rs 30,000. Tenants are leveraging the opportunity to move into better societies,” Mohammad says. 

Mohammad points out that the rental market has gone down but the investment market has not. 

 

Monthly expense

When homes are left empty in apartments and gated communities, the owners continue paying maintenance. This is a reason they are looking for tenants, even if at lower rents.