Renting a house in Bengaluru has become a priority over other things, for most people on a perennial house hunt in the city.
Atin Bose, a product designer in Bengaluru, recently held a placard at an IPL match in the city that read, “Looking for 2BHK in Indiranagar.”
For Bose, it has been a challenging journey. “My current landlord suddenly decided to increase the rental by 60 percent,” Bose, a bachelor who stays in a 2BHK in Indiranagar for a monthly rent of Rs 35,000, told Moneycontrol. Bose shares the flat with a friend.
“Now, in Indiranagar, we do not find a house below Rs 60,000 or even Rs 80,000. I think finding a house for me is a priority over even marrying Virat Kohli,” Bose added.
For Bengalureans, Ee Sala Cup Namde, a famous Royal Challengers Bengaluru (RCB) phrase that roughly translates to “This year’s cup is ours”, is a common desire. However, today they just want affordable apartments.
With a severe mismatch in demand, rentals in Bengaluru have shot through the roof. Rentals have increased by 20-30 percent in some areas, and by a whopping 40 percent in certain areas.
Rentals across prime locations like Indiranagar, Whitefield, and IT corridors like Marathahalli and Bellandur in south-east, Sarjapur in east and Hebbal in the north, have jumped by 20-30 percent.
Sunil Singh from Realty Corp said a semi-furnished 2 BHK in Indiranagar can start anywhere from Rs 40,000 and go up to Rs 60,000. For 3 BHKs, the monthly rentals can touch Rs 1 lakh.
Bose, who has been on a house hunt for two months now, said, “We could not find any decent 2BHK for less than Rs 60,000 per month. And on top of it, for us bachelors, it’s a growing ordeal,” he added.
With the city’s economy and private sector stirring back to life, landlords are looking to recoup revenue lost during the pandemic when tenants returned to their hometowns. While some tenants deem Google interviews easier than cracking a landlord interview, others need updated CVs and LinkedIn profiles to find a house.
Brokers said there will be high demand in Whitefield, Mahadevpura, Brookfield, and Varthur over the next few months. In Bellandur, a two-bedroom apartment that was available for rent for Rs 30,000-Rs 35,000 now commands about Rs 45,000.
According to NoBroker data, rentals in Varthur have increased 57 percent over the past few years. An apartment that commanded Rs 23,000 per month in 2022 is listed at Rs 30,000 in 2023.
Property brokers say that a fully functional metro line in parts of Bengaluru has also led to capital values appreciating by at least 10-15 percent.
In suburban areas like Hoodi, close to Mahadevpura and Kundalahalli metro stations, the buying price of a premium 1 BHK has already touched Rs 1 crore and will appreciate further.
In Indiranagar, a fully-furnished 2BHK, which was priced at Rs 80 lakh before, is now going for more than Rs 1 crore. In upcoming suburbs such as Hennur too, a 2 BHK is priced at Rs 60 lakh- Rs 70 lakh.
Once affordable, PGs are not so anymore
Before COVID, paying guest (PG) accommodations in Bengaluru used to be affordable and one of the most sought-after choices for students and young working professionals.
However, today with a mad rush for inventories in Bengaluru, PG rates have skyrocketed — with some places seeing a 50 percent hike.
Sohini Ghosh, who stays near a PG in Marathhalli in the south-eastern part of Bengaluru, said: “Last week, the owner called me in the morning and said that the rent will be increased again.”
Ghosh is paying Rs 13,000 for a double-sharing room and he said the rental has been increased at least three times by Rs 3,000 in the last year, without any notice.
Narendra Bajwal, who also stays close to the IT corridor, said: “I shifted to the PG accommodation, only 13 days back, and today they have increased the rental by 35 percent.”
Narayan Awasthi, who was paying Rs 6,000 as a monthly rental in a double-sharing PG room, now pays Rs 15,000, a whopping 150 percent jump.
Singh added pre-COVID, a single sharing room in a PG accommodation, close to the IT corridors and prime locations, was going for a monthly rent of Rs 8,000. “Today, prices have jumped to Rs 14,000 – Rs 16,000. Similarly, double-sharing rooms have jumped by 40-50 percent, too,” he added.
After the Bengaluru floods last year, now calls for available PGs in the city have flooded our offices, Singh said. But no inventories are available, he said.
Redevelopment of apartments
With demand surging, brokers say in several buildings in Indiranagar and Koramangala, 4BHKs have been redeveloped as PGs.
“Several young investors in the city, including IT professionals, have started renting out 4BHKs for more than a lakh and convert them into PGs, with 24 bunkers in total,” Singh added.
Each room has three bunkers, with an average rental of Rs 8,000 per bunk and a cumulative monthly income of Rs 1,92,000.
However, running a PG requires a licence in Bengaluru and also consent from the landlords in such cases.
Brokers say rentals for PGs will further see a hike of about 10 percent. However, several government policies can make them more expensive.
The central government is planning to impose a 12 percent GST on PG accommodations, and student housing for less than Rs 1,000 per night. For others, the tax will be 18 percent.
Varun Pahariya, director of alternative business at JLL, said this would have a significant effect on PGs and it will increase prices across the board.
News Source: https://www.moneycontrol.com/news/business/why-did-bengaluru-man-go-house-hunting-during-ipl-match-10439981.html/amp