Rents in India’s technology hub of Bangalore have nearly doubled in the last year, making it the country’s hottest real estate market, with landlords now demanding the highest proportion of the property’s value as rent. Many of the major companies in the city, such as Alphabet Inc.’s Google, Amazon.com Inc., Goldman Sachs Group Inc., and Accenture Inc., employ over 1.5 million workers, however many of them were forced to relocate remote work or leave the city entirely due to the Covid-19 pandemic, leading to rental prices plummeting.
Now, however, with the economy and private sector beginning to come back to life, landlords are pushing rents up to make up for their losses – resulting in a seller’s market. Engineers and workers in Bangalore describe the process of finding an appropriate place to rent as an additional job interview. With rental demand outweighing available stock, prospective tenants have to present themselves exceptionally well to even have a chance of being accepted.
The shortage of housing options is made worse by the restriction on new construction projects due to the pandemic. In the first quarter of 2021, Bangalore added only 13,560 residential units, compared to a 55% jump in Mumbai during the same period. With the addition of a new 10,000 capacity Google campus, the focus of the rental woes is now on the neighborhoods in central Bangalore, Whitefield and the Outer Ring Road (ORR).
The ORR stretch alone has about 350 companies, with Intel Corp., Microsoft Corp., KPMG, Goldman Sachs and Morgan Stanley Inc. located along the area. Many of these workers find themselves in a difficult situation due to the steep rise in rent prices and low availability. Despite incredibly competitive rates, some still manage to secure a roof over their head, as is the case with Ramyakh Jain, who found his two-bedroom apartment in February, though paying one and a half times the rent and living in a space half the size of his previous dwelling in New Delhi’s Gurgaon district.
Ultimately, this situation serves as a reminder of the importance of the real estate sector in powering India’s economy. Despite the unfortunate consequences experienced by many workers in the city, the high demand and uptick in rental prices signify a bright future for the country’s real estate market and housing sector.