The landscape of work is undergoing a transformation as IT and service companies roll back their work-from-home policies, leading to an unexpected consequence—a significant spike in house rents. Major IT hubs like Pune, Chennai, Bengaluru, and others have witnessed a substantial surge of 10-40% in rental prices as employees are once again required to spend a few days each week working from the office.
The resurgence in rental costs is attributed to multiple factors, including the escalating expenses of real estate and landlords aiming to recoup financial losses incurred during the pandemic. Industry consultants have analyzed this growing trend and provided valuable insights into the evolving housing market dynamics.
The surge in demand from working professionals, coupled with a shortage in housing supply, has fueled the rise in rental prices. Industry experts foresee this trend continuing its upward trajectory as more employees plan to relocate to metropolitan areas in the coming year of 2024. Despite the challenges faced during the waves of the Covid pandemic, residential rents have made a noteworthy recovery, showcasing the resilience and strength of the Indian Infotech sector.
Companies like Wipro and TCS have implemented a mandatory three-day office work policy, leading to a demand-supply imbalance in certain city areas. Young professionals, aiming for a better work-life balance, are keen to reside closer to their workplaces, contributing to the current rental surge. Landlords are now even requesting LinkedIn profiles from potential tenants as a measure of job security.
Market data indicates that 2-BHK homes with over 1,000 sq ft of space and 3-BHK units are currently the most sought-after, especially in key areas like Gachibowli in Hyderabad, Whitefield, and Sarjapur Road in Bengaluru.
Data from the real estate platform NoBroker reveals that average home rents in the top six service sector employment hubs have experienced a growth rate ranging from 12% to 24% between October 2022 and October 2023.
As per available information, an increase in the number of employees returning after Diwali is expected, leading to a further rise in rental prices. The sudden reversal of the work-from-home policy has caught the rental housing market off guard, with landlords now attempting to compensate for revenue lost during the pandemic by imposing higher rental charges.
