CHENNAI: As Information Technology (IT) and other service companies roll back remote work policies and mandate employees to work from office two-three days a week, house rentalshave seen a sharp 10-40% hike across IT hubs and metro cities such as Bengaluru, Chennai, Hyderabad, Mumbai, Pune, and Delhi-NCR. While real estate costs and rents have gone up, landlords, too, are trying to compensate for the losses of the pandemic months by increasing rents, consultants said.A shortage in supply and a significant uptick in demand from working professionals has fuelled the hike and this is likely to rise further as more employees migrate back to settle in metros in the new year 2024, they add.
“After an almost terminal downturn during the Covid waves, residential rents are one of the most remarkable comeback stories. The fact that the next two hotspots for rental value growth are also IT/ITeS-centric cities also underscores the fundamental strength of the Indian Infotech sector, despite belt-tightening moves in the industry,” Anuj Puri, chairman, Anarock Group said.
Most companies have mandated employees to return to office at least three days a week. Wipro has made it mandatory for its employees to work from office three days a week effective 15 November, and TCS has also ended its remote work practice asking its 6 lakh+ employees to work from offices. With youngsters choosing to live in proximity to workplaces for better work-life balance, demand-supply mismatch has been more pronounced in pockets of the cities. Landlords are even seeking LinkedIn profiles of home seekers for job security, techies told TOI. Two-BHK homes with more than 1,000 sq ft space and 3BHK units are the most sought after, and rentals in locations such as Whitefield and Sarjapur Road in Bengaluru, and Gachibowli in Hyderabad, market data shows.
According to data from real estate platform NoBroker, growth in average home rents from October 2022 to October 2023 for top six service sector employment hubs — Bengaluru, Hyderabad, Mumbai, Pune, Delhi-NCR and Chennai — stood in the range of 12-24%. Saurabh Garg, co-founder and chief business officer, NoBroker said, “Most employees with kids are already back as schools have opened. Many unmarried employees had also come back earlier as they were missing the city lifestyle. We expect more to come back after Diwali and this would see further jump in rents.”
“This sudden rollback of work-from-home policy has caught the rental housing market unaware as demand for housing had already breached pre-pandemic levels. Landlords are trying to recover lost revenue from the pandemic by charging exorbitant amounts,” Altaf Ahmad, CBO & co-founder of property management platform Azuro said.