In defiance of prevailing global economic headwinds, India's real estate sector has emerged as a beacon of resilience, experiencing a notable surge over the past two years. Amongst the various segments, the rental market has emerged as a standout performer, outpacing its global counterparts. Notably, Bengaluru, often dubbed the IT capital of India, has emerged as a focal point for this remarkable upswing.
Recent data indicates that Bengaluru's rental market has experienced an astounding 24 per cent average inflation, with certain pockets witnessing an even more remarkable 30 per cent spike. This surge has primarily been fueled by the resurgence of office operations in major cities, driving demand for properties around IT parks and office hubs.
The dynamics driving this surge are multifaceted. On one hand, the reopening of offices has rekindled demand for residential units, particularly those in proximity to major commercial centers. On the other hand, the supply side of the equation has struggled to keep pace with this heightened demand, exacerbated by disruptions to the real estate supply chain during the COVID-19 pandemic.
Notably, Bengaluru is not alone in experiencing this rental market boom. Other major cities such as Hyderabad and Chennai have also witnessed substantial increases in housing rents. Chennai recorded an average rent inflation of 18 per cent, closely followed by Hyderabad at 16 per cent. Some pockets in Hyderabad even experienced a remarkable rental spike of up to 25 per cent.
A recent survey conducted by NoBroker highlights the growing appetite among landlords to capitalize on this lucrative market. An overwhelming 86 per cent of landlords expressed interest in purchasing a second property to leverage the current market conditions.
Saurabh Garg, Co-founder & Chief Business Officer of NoBroker.com, shed light on the underlying factors contributing to this phenomenon. "The work-from-home trend, which initially tempered rental inflation in cities like San Francisco, has reversed with the return of people to offices in Bengaluru," he explained. "Construction halts during the COVID-19 pandemic disrupted the real estate supply chain, leading to a supply-demand mismatch post-COVID. This, coupled with increased demand from bachelors transitioning from paying guest accommodations to houses, has fueled the rental inflation."
Indeed, amidst global uncertainties, India's real estate rental market stands as a testament to the resilience and dynamism of the sector, offering promising opportunities for investors and landlords alike.
© 2023 Rera News. All rights reserved.