While rents have generally gone up in cities in 2022, the maximum pain was felt by tenants in Bengaluru, Delhi-National Capital Region and Hyderabad with rents increasing upwards of 30 percent for over 20 percent of tenants, a study by real-estate platform NoBroker has found.
The survey, with 26,000 participants from Bengaluru, Mumbai, Pune, Chennai, Hyderabad, and Delhi-NCR, said that rental inflation in key areas is up to 12 percent in several cities.
About 42 percent renters said they have increased their range up to 10 percent, whereas 32 percent of respondents said their rents had increased by more than 20 percent in Bengaluru, Delhi-NCR and Hyderabad.
According to the report, Bengaluru saw rental inflation of 33 percent over the last five years, Mumbai 30 percent, and Delhi-NCR about 11 percent.
The report pointed out that about 35 percent of tenants have switched jobs and have cited that as the key reason for relocating.
Job-switching was mentioned as a major reason for relocation to Pune, Chennai, and Hyderabad. Most of the rent increase was seen in Bengaluru, Delhi-NCR, and Mumbai. Additionally, the need for a bigger house was the reason for relocation for 30 percent of Chennai-based tenants, the highest among all cities.
"About 19 percent of tenants shifted as they needed a bigger house. With offices reopening, maybe people are fine with space issues, as this percentage has dropped from 29 percent in 2021. About 32 percent of tenants mentioned rent increase as the major factor (an increase from 18 percent in 2021)," the report added.
Rental spikes due to preferred locations
About 90 percent of the people from Bengaluru and Hyderabad surveyed mentioned that distance from the workplace was an important factor in choosing a locality. A sizable 78 percent from Mumbai also said that distance was important.
With vacant land parcels getting scarce in city centres where major offices are located, metro cities like Bengaluru and Mumbai saw a sudden spike in rental costs after offices reopened.
"About 74 percent of respondents felt that rents for similar properties have increased. For instance, properties that were available for rent for Rs 20,000 are now available for Rs 25,000 - Rs 30,000," the report said.
Delhi-NCR and Hyderabad saw the largest spike in rents at 79 percent, followed by Bengaluru at 76 percent and Chennai at 74 percent.
About 21 percent of respondents from Bengaluru and Delhi-NCR said rents have soared by 30 percent or above.
In Bengaluru, HSR Layout, Whitefield, Marathahalli, Bellandur, and Koramangala are the booming locations for rentals, the survey found.
In Mumbai, Thane West, Andheri West, Airoli, Andheri East, and Malad West are the hubs for rental choices.
Post-COVID inventory crunch driving rentals
After COVID, several vacant land parcels have been unlocked across the country. With offices reopening, most people have started returning from their hometowns.
The report found that maximum landlords from Bengaluru (64 percent), and Pune (62 percent) mentioned that they had increased rents after COVID.
Delhi and Chennai had the maximum percentage of landlords who have not increased rents during the pandemic.
In Bengaluru, about half of all landlords surveyed said they have increased the rents up to 10 percent, and about 20 percent of them said they have increased the rent by 30 percent or above, the highest among all cities.
"An average of 53 percent of landlords across cities have increased their monthly rent by up to 10 percent, while 16 percent of landlords surveyed have increased their rent by 10-20 percent. And 32 percent of landlords have increased their monthly rents by 20 percent and beyond," the report added.
Additionally, NoBroker found that about 89 percent of landlords are looking to invest in a new property, 8.5 percent more since last year.