By: Pune Pulse
November 18, 2023
Pune: IT and other service companies are now reversing their remote work policies and requiring employees to work from the office for a few days each week. As a result, house rentals in IT hubs and major cities like Bengaluru, Chennai, Hyderabad, Mumbai, Pune, and Delhi-NCR have experienced a significant increase of 10-40%.
This surge in rental prices can be attributed to the rising costs of real estate and the landlords’ attempts to recover from the financial losses incurred during the pandemic. Consultants have observed this trend and provided insights into the situation.
The surge in demand from working professionals, coupled with a shortage in supply, has contributed to the increase in rental prices. Experts predict that this trend will continue to rise as more employees relocate to metropolitan areas in the upcoming year of 2024. Despite the challenges faced during the Covid waves, residential rents have made a remarkable recovery. It is noteworthy that the two cities expected to experience the highest growth in rental values are also major hubs for the IT/ITES industry. This highlights the resilience and strength of the Indian Infotech sector, even in the face of cost-cutting measures within the industry.
Wipro and TCS are among the companies that have made it mandatory for their employees to work from the office three days a week. This has resulted in a demand-supply mismatch in certain areas of cities, as young professionals seek to live closer to their workplaces for a better work-life balance. Landlords are even requesting LinkedIn profiles from potential tenants for job security. Market data shows that 2-BHK homes with over 1,000 sq ft of space and 3-BHK units are the most popular, particularly in areas such as Gachibowli in Hyderabad, Whitefield, and Sarjapur Road in Bengaluru.
Data from real estate platform NoBroker reveals that the average home rents in the top six service sector employment hubs, namely Bengaluru, Hyderabad, Mumbai, Pune, Delhi-NCR, and Chennai, experienced a growth rate ranging from 12% to 24% between October 2022 and October 2023.
As per the information provided, it is expected a further increase in the number of employees returning after Diwali, which will consequently lead to a rise in rental prices. The sudden reversal of the work-from-home policy has taken the rental housing market by surprise, as the demand for housing had already surpassed pre-pandemic levels. Landlords are now attempting to compensate for the revenue lost during the pandemic by imposing exorbitant rental charges.