Rentals surge in metros on return to offices, schools

Chennai: Rentals had nose-dived due to Covid. But residential rentals have started reviving across metros as employees are returning to offices and schools are reopening across the country. Among the seven top metros, Bengaluru, Mumbai Metropolitan Region and Pune have recorded the highest spike in residential rentals — in the 6-20% range — during the first half of this year as compared to three years ago, an analysis by property consultants has found.
Since the pandemic, several tenants seem to prefer renting houses near their offices, and that too bigger homes with an option for additional rooms for hybrid work and kids’ schooling. While rentals increased by 7-15% in Delhi NCR, Hyderabad and Kolkata witnessed a 5-10% spike during January-May this year. In Chennai, residential rentals went up by 5-15%.
This is a substantial spike for the seven metros, which doubled their rentals when compared with the January-May pre-Covid period of 2019. Rentals in these cities had crashed by anywhere from 2% to 9% during the corresponding period of 2020 and 2021 due to Covid.
The trend towards moving into shared accommodation options is also making a comeback. This is particularly true among those looking for rental options near their workplaces. Sumanth Reddy Arani, vice-chairman of the National Association of Realtors India, said tenants of small and medium -sized apartments moved to larger units after it became vacant during the peak Covid time. “Those who vacated from cities during Covid and migrated to their hometowns due to the work-from-home option are returning now. This has triggered the demand for larger units, resulting in rents going up over and above the average annual revisions,” he said.
Rohan Sharma, director (research & REIS) for India at JLL said prime rental housing corridors across major cities, especially those near key commercial hubs, have seen growth of 14-20% as demand for rental housing has risen due to people returning to the metros. Santhosh Kumar, vice-chairman of Anarock Group, said some housing societies in peripheries, where the demand was low in the pre-Covid period largely due to location of the project outside city limits, have now suddenly seen a spurt in demand.
Vivek Rathi, director (research) at Knight Frank India, said, “Amenity spaces that gated community projects offer have also elicited renters’ interest.”