The onset of the pandemic, the subsequent lockdown and the resultant economic distress has forced many -- mainly those who lost their jobs or had to work from home, to return to their hometowns. Bengaluru is looking at another week of lockdown starting from Tuesday night with many speculating that the duration may be extended.
TNM spoke to multiple players in the housing rental sector about how the migration of people out of the city has impacted the market.
According to some, the occupancy of rented property has gone down by 75%.
Dr. Nikhil Sikri, Co-founder and Chief Executive Officer (CEO) at ZoloStays, which offers both shared and private accommodations, said that the market has been hit badly. Stating that occupancy rate is almost quarter to what it was before the pandemic, he says that they were better placed.
â€śWe are at a much better place in the market but it is just an oasis in the middle of the desert,â€ť he told TNM.
â€śThe sector has struggled a lot in the last few months and further lockdown will lead to many losing their livelihoods. More than 300 PG (paying guest) units, each with around 80 beds, have already been shut in Bengaluru. There seems to be no respite. Many smaller operators could collapse in the coming months,â€ť he added.
Stating that there were hardly any new customers in the market to determine if rental prices had gone down, he said, â€śAt this point, there is no market, so there is no price marker.â€ť
Prem, a real estate agent working in Ulsoor said that business has been on a downward spiral since March due to a dearth of clients for newer, upscale properties. â€śWhile many with stable whitecaller professionals have stayed on, many informal workers who would work in small businesses and live in shared accommodation with others have vacated,â€ť he said.
Prem maintains that this has not brought down the price of all property. â€śOn average, there may be a 10% decrease in price depending on the negotiation between the owners and the tenants, but there is no blanket reduction even though many properties are lying vacant.â€ť
Girish L, another real estate agent working in Koramanagala said that his business has also run dry since mid-March and had never been this slow.
â€śThere have been cases of prices coming down by 30-40%, but those are isolated. It is solely dependent on the owner's decision. But it is true that many properties are lying vacant as many have lost jobs or can work from home.â€ť
Compared to these, Amit Agarwal, CEO of Nobroker.com, a pan-India agency painted a brighter picture.
Speaking to TNM, he claimed that business is coming back to normal after it was hit in March.
â€śI know that the anecdotal impression is that people are moving away in masses and the rent prices are going down but this isnâ€™t true. Whatâ€™s happening is that people usually move houses in May-June every year. Itâ€™s a peak month for the rental cycle as people change jobs or children are enrolled in new schools,â€ť he told TNM.
Pointing out that people with families who may have moved to their hometown were likely to retain their properties, he estimated, â€śAround 50 to 60% of people whose 11-month tenure got over in their existing houses, likely renewed their rental agreement for another year.â€ť
â€śThe rent rate had gone down by 6-8% in the month of April-May but now it is getting back to normal as owners are not willing to decrease their rates for the properties,â€ť he said, adding that only a small percentage of the population were leaving the city for good.