Apartment rentals in the nation’s IT capital have shot through the roof, climbing as much as 40 percent in some areas. Source: Flickr/Nicolas Mirguet
A couple of months ago, Anglushulekha Bora shifted to a one-bedroom house in Bengaluru’s HSR Layout, paying a rent of Rs 12,000 a month. However, the landlord suddenly increased the rent to Rs 18,000.
Bora says she has no choice but to look for a new place to stay. Rentals in Bengaluru have become largely unaffordable and Bora told Moneycontrol she will probably shift to a two-bedroom apartment with a flatmate to share the cost.
Apartment rentals in the nation’s IT capital have shot through the roof, climbing as much as 40 percent in some areas. As the city’s economy and private sector stir back to life, landlords are raising rents to recoup the revenue lost during the pandemic, when tenants returned to their hometowns.
Techies are being asked to vacate within a month. In startup hubs such as HSR Layout, where Bora stays, Sunil Singh, a realtor at Realty Corps, rented a two-bedroom apartment for Rs 60,000, an almost 40 percent increase from last year.
Mayuree Pal’s landlord increased the rent by 15 percent from Rs 15,400 in Banaswadi, a growing suburb in the city’s northeast.
“As per our rental agreement, the rentals can be hiked by only 5 percent. When I pointed this out to my landlord, we finally came to terms with it,” said Pal.
Tough house hunting
While Pal was lucky, others were not as fortunate. Some landlords ask tenants to vacate if they cannot pay the higher rent. Sneha Majdi, who lives in a one-bedroom apartment in Marathahalli, said the landlord is mulling a 15 percent increase in rent. After scouting for several months, she has given up on house hunting.
“Today, it is impossible to find a one-bedroom apartment for Rs 10,000, like my current one. Also, for apartments available now, none of them has deposits lower than Rs 60,000 to Rs 80,000,” she said.
Bora, who has been house hunting for four months, said solving Calculus equations for her engineering degree exams was easier than finding an apartment in Bengaluru.
“Brokers say there are none available in most of central or eastern Bengaluru. What’s available are two-bedroom flats at Rs 30,000 or more,” she said.
However, vacating an apartment because the landlord increased the rent is not always a viable option, as one tenant found out.
“The landlord increased the rent by 50 percent. After I vacated the house, I found a new apartment but ended up paying 80 percent more than the previous one,” said Sudeep, who goes by one name.
Jayshree Chatterjee, who paid a deposit of Rs 1.8 lakh and Rs 28,000 monthly for a three-bedroom home at Kadubeesanahalli, close to Marathahalli, was asked to vacate even though she agreed to a 10 percent hike.
“The landlord then rented the apartment for Rs 35,000 (about a 30 percent hike) to another tenant,” she said. Today, Chatterjee lives in a two-bedroom flat for which the deposit was Rs 1 lakh and rent is Rs 20,000 monthly, in Halasuru, close to MG Road.
“After months of house hunting, I managed to find an affordable apartment,” she added.
Back to office
With many companies calling their employees back to office in the past few months, there’s been a major influx of people coming back to Bengaluru.
According to Prasadh MS, a workforce research and communication specialist at Xpheno, a staffing firm, Bengaluru absorbed 140,000 professionals from other cities and towns over the past year. However, during this period, the city also lost 95,000 professionals to other locations.
Experts said most of the housing inventory in Bengaluru launched after the pandemic has been absorbed, leading to a supply crunch. With many employees back to working in the office – even in hybrid mode – there has been a spurt in rental demand over the past several months.
In the more traditional areas, there has been no additional supply of homes.
“For example, in Bellandur, lots of startups and companies are present.
However, gated societies in this area are barely two or three, and new supply has not rolled out,” said Amit Agarwal, cofounder of NoBroker.
In Bellandur, a two-bedroom apartment that was available to rent for Rs 30,000-Rs 35,000 now commands about Rs 45,000. Agarwal explained that given the limited supply in these areas, tenants are ready to pay a premium.
He also noted that searchers and queries on their platform have increased by 30 percent this year.
“One more reason can be that people are relocating faster than they used to. From two years ago, today people are relocating in one year or 1.5 years, given that the average tenure of jobs has come down,” he added.
At least four tenants told Moneycontrol they are switching jobs and relocating.
Sohini Ghosh (name changed) is changing her job, moving from the eastern IT corridor towards Marathahalli in the southeast. However, rentals aside, apartments are not easily available, she said.
Brokers said there will be high demand in Whitefield, Mahadevpura, Brookfield, and Varthur over the next few months. According to NoBroker data, rentals in Varthur have increased 57 percent over the past few years. An apartment that commanded Rs 23,000 in 2022 is listed at Rs 30,000 in 2023.