The experience of securing a home also turns into a highly competitive race.
Rents in Bengaluru, India’s tech hub, have almost doubled since the beginning of last year, making it the country’s hottest housing market.
Landlords in the city, often referred to as India’s Silicon Valley, now charge most of their properties’ value as rent, surpassing the financial center of Mumbai, according to data from market researchers.
More than 1.5 million employees work in the state capital of Karnataka, including those of global companies such as Google of Alphabet Inc., Amazon.com Inc., Goldman Sachs Group Inc. and Accenture Inc. moving to remote work or moving out of town, driving down rents. With Bengaluru’s economy and private sector reviving, landlords are trying to recoup lost revenue and are in a seller’s market.
“The rental market is too hot right now,” said Prashant Thakur, head of research at real estate consultancy Anarock. “Apartments had to be rented out at very low rates during Covid as many moved back to their hometowns. Now that people are going back to office, landlords are making up for their losses with higher rents.”
Data from Anarock shows that rents in several neighborhoods in Bengaluru have increased by double digits since 2019, following a broader rise in India’s major cities. But Bengaluru’s more recent cost hike is bigger because it took a bigger hit from the pandemic, market observers say.
The experience of securing a home also turns into a highly competitive race.
Ripu Daman Bhadoria, who moved from Amazon in Seattle to Google in Bangalore last year, likened his house-hunting to handling a job interview at the Mountain View, California-based search giant. “Engineers think Google interviews are tough, but this is another level,” said the 36-year-old engineering manager who has several people on his team facing the hiring challenge.
“The stress affects health, it affects work, everything.”
The shortage of supply has led real estate agents and very picky homeowners to demand LinkedIn profiles and resumes from potential renters, said Arpan Batra, the owner of real estate consultancy Anzen Spaces. She and Waquar Ahmed of Ahmed Realty – which has 35 clients looking to buy a home and have no inventory – both saw rents double in the past year. Several interview rounds, also on Zoom, are now commonplace.
Part of the problem is an artificial supply constraint, Batra said, caused by construction stalling during the pandemic. Bengaluru only added about 13,560 housing units in the first quarter of this year, an increase of just 3% compared to Mumbai’s 55% increase, according to Anarock. Bengaluru is now the top Indian city for rental yield at 3.9%.
Nowhere is the problem more acute than in the neighborhoods of central Bengaluru, Whitefield and the Outer Ring Road (ORR). There are about 350 companies along the 17-kilometer ORR stretch and they employ a combined workforce of one million, said Krishna Kumar Gowda, managing director of the Outer Ring Road Companies’ Association. The concentration is high and affects the availability of rental housing within a reasonable distance, he said.
Intel Corp., Microsoft Corp., KPMG, Goldman Sachs and Morgan Stanley Inc. have their offices down the road and a new Google campus with the capacity to house 10,000 employees is coming soon, Gowda said.
Ramyakh Jain, who moved to Bengaluru for a new job, found a two-bedroom rental home for 50,000 rupees ($600) a month in February. It is one and a half times the rent and only half the size of the apartment he previously owned in New Delhi’s Gurgaon district. It took him weeks to scan the market with the help of no fewer than 25 brokers. Still, he considers it an achievement.
“I’ve found a roof over my head,” said Jain. “I am among the lucky ones.”
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)
