Many such tenants have moved to their hometowns or are in the process of doing so, with companies also extending the work-from-home option for a few more months as there is no let-up in the pandemic situation.
According to property brokers and broking firms, rentals across Mumbai, Chennai, Bengaluru, Pune and Delhi-NCR have declined by 4-5% this year, while landlords will see no appreciation for two years successively including the year bygone. “The Covid-19 outbreak and the resultant economic fallout had an impact on the rental residential category,” said Sudhir Pai, CEO of property portal Magicbricks.
“During the height of the lockdown, rents softened in some areas, but since then the category has recovered fast and we expect the volumes of rental transactions to remain stable in 2021. Most tenants were not keen on shifting places and stayed put in their current accommodations. But given the scenario of job losses and salary cuts, in some markets, tenants vacated their properties or demanded rent relief.”
Magicbricks is a part of Bennett, Coleman & Co, which publishes The Economic Times.
Demand for rental accommodations has gone down at least 25% in the last 11 months. Given the scenario, rentals, including for high-end properties, are expected to soften further.
“Around six of my apartments were vacated in one go post the lifting of lockdown. I was forced to take a cut on the rental and give some of these apartments at lower rent,” said Krishnappa Murthy, who owns multiple properties across Bengaluru.
Salaried population drives the demand for rental properties and a large percentage of tenants in cities like Bengaluru, Hyderabad, Pune and Mumbai belong to sectors such as banking, financial services and insurance, software and pharmaceuticals.