To let, at cheaper rates

To let, at cheaper rates


Mohammed ShariffFirst Published : 24 Feb 2009 11:03:05 AM ISTLast Updated : 24 Feb 2009 02:00:16 PM IST
After the boom, comes the fall.
Once the sunshine sector of the city, the rental business is reeling under the recession storm.
According to local house brokers, residential rents have fallen by nearly 30 per cent in areas such as Jayanagar, Koramangala, Sarjapur, areas near by Whitefield, locations where a majority of the IT professionals in the city prefer to stay. The land and rent value climbed nearly 300 per cent during the boom years.
Jai Bharat Real Estates agents, which owns apartments at Sarjapur, told Expresso, that during the bull run rental rates were irrational as most of the people who came from outside the city, paid whatever was asked for. “Now not only have the arrivals fallen but people who are coming in are asking for homes at lower rents too. We have many apartments that are lying vacant,” a source in the company said.
“Earlier we use to charge Rs 15,000 per month for a two-bedroom house, now the same house is not being occupied for Rs 10,000 at Sarjapur,” he said.
K Rajashekar, a broker at Jayanagar said, “A complete freeze on recruitment by many IT and ITES firms has reduced the number of people from other states coming in significantly. Earlier, brokers use to get 10-20 (new clients to Bangalore) per month, but now we get only two to three clients.” Shivkumar, who owns an apartment in Jayanagar, settled for a 20 per cent cut on a monthly rent of Rs 40,000 as his tenant, who was working for multinational firm,decided to vacate last month.
According to housing price index NHB Residex, of the National Housing Bank, realty prices in Bangalore had grown at an annual average of 21.6 per cent between 2002 and 2007. This was faster compared with Delhi, Mumbai and Calcutta, where rates rose by 20.4, 18 and 15.7 per cent, respectively. Prices of homes in Bangalore’s suburbs grew faster than in the central areas where rates were already high.