Rents on subways increase when returning to offices and schools

Chennai: Rentals had taken a nosedive due to Covid. But apartment rents have started to pick up again on the subways as employees return to offices and schools reopen across the country. Among the top seven metropolitan areas, Bengaluru, the Mumbai metropolitan area and Pune have seen the highest increases in apartment rents – ranging from 6% to 20% – in the first half of this year compared to three years ago, an analysis by real estate consultants found.
Since the pandemic, several tenants seem to have preferred homes closer to their offices, over larger homes with the option for additional spaces for hybrid work and children’s schooling. While rents in Delhi NCR increased by 7-15%, Hyderabad and Kolkata saw increases of 5-10% from January to May this year. In Chennai, residential rents increased by 5-15%.
This is a significant increase for the seven subways, which doubled their rents compared to the pre-Covid 2019 January-May period. Rents in these cities had fallen by 2% to 9% in the corresponding period of 2020 and 2021 because of Covid.
The trend towards moving to shared flats is also returning. This is especially true for those looking for rental opportunities close to where they work. Sumanth Reddy Arani, vice-chairman of the National Association of Realtors India, said tenants of small and medium-sized apartments have moved to larger units after these became vacant during the Covid peak period. “Those who left cities during Covid and migrated to their hometowns due to the work-from-home option are now returning. This has sparked demand for larger units, which has caused rents to rise above average annual revisions,” he said.
Rohan Sharma, Director (Research & REIS) for India at JLL, said prime rental corridors in major cities, particularly near major commercial hubs, have seen 14-20% growth as demand for rental housing has increased due to people returning subways. Santhosh Kumar, vice chairman of Anarock Group, said some housing associations in outlying areas, where demand was low in the pre-Covid era largely due to the project’s location outside city limits, have now suddenly experienced a surge in demand.
Vivek Rathi, Director (Research) at Knight Frank India said: “Recreational spaces that offer gated community projects have also attracted interest from tenants.”

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