Tenants snapped up all 35 apartments in a newly completed project in Bengaluru's Sarjapura area within 48 hours of becoming available as high demand for flats persisted amid a shortage in the city.
The Sarjapura area is located close to IT offices in south and east Bengaluru. The apartments in the project, ranging in size from 850 square feet to 1150 sq ft, came into the rental market a week ago. The new tenants will be able to move in next month.
“The number of total queries received would have been more than triple for the project,” said John Christopher, who brokered the deal. “Each two-bedroom apartment was rented out for Rs 35,000. In January, the owner was planning to rent them at about Rs 20,000-25,000 per month.”
The 40 percent increase in rent in the Sarjapura area project is reflective of the severe mismatch in demand and supply in India’s IT capital. Landlords in Bengaluru are riding a boom as tenants returning to the city to work in offices struggle to find apartments.
Rents in most prime locations in the city including MG Road, Koramangala, Whitefield and Indiranagar have become unaffordable, jumping by 40-50 percent. Local brokers said one- and two-bedroom apartments have become scarce and the few that are available command skyrocketing rents.
"Several friends of mine, including myself, have been forced to move out of existing apartments after the landlords hiked the rent by 40-50 percent," said a techie who did not want to be identified. "The IT market has cooled down and most people in my circle did not get any hike this year. Several of us will not be able to afford the rent going forward."
Suburban boom
The asking rent for a one-bedroom apartment on Lavelle Road in the heart of the city was Rs 75,000 per month, while another one on St John's Road was Rs 45,000.
A posh two-bedroom apartment in Prestige Shantiniketan, close to Whitefield, was rented out for Rs 60,000 per month.
According to Sunil Singh, director of Realty Corps, rents in several remote areas like the suburbs of JP Nagar and Electronic City in the south will appreciate over the next few quarters even though roads are in bad shape and there is no metro connectivity. “The tenants have no other choice today," he said.
While newly launched apartments in Bengaluru are rented out within a few hours, tenants and brokers said rents can go up even overnight.
The rent for a two-bedroom apartment in north Bengaluru's Mahadevpura area soared to Rs 45,000 per month from Rs 35,000 the previous day.
In one case, the rent for a two-bedroom apartment in the posh Indiranagar area listed by Google techie Bharath MG jumped to Rs 55,000 from Rs 45,000 within a couple of hours.
"I won't increase the rent once we agree and the rental agreement is signed," Bharath told Moneycontrol.
According to MagicBricks, an online property platform, rental listings in Bengaluru dipped by 10.6 percent between April and June. Experts said unless apartments that are being constructed hit the market within the next few years, the rental real estate market in the city will continue to remain in a frenzy.
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