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Falling rents attract tenants
Here is some good news for those who are looking for a house on rent. And for those coming from high price index locations like Mumbai and Bengaluru, it is just a windfall.
Hyderabad: Here is some good news for those who are looking for a house on rent. And for those coming from high price index locations like Mumbai and Bengaluru, it is just a windfall. Hyderabad is fast becoming a cheap city going by house rent index.
According to the rental brokers, house rents are falling gradually and will fall further at least by 15 to 20 per cent in the next couple of months, owing to reports of regularisation houses under BRS and LRS in GHMC limits and also huge vacancies being created with the mass migration of Andhra government employees and their families.
In all, 18,500 and odd Andhra Pradesh government employees, including around 11,000 in the state secretariat alone, are on relocation orders. That means about 18,500 families will move from Hyderabad in next two months, leaving still more dwellings vacant in the city.
“Looking at the trend we feel the rents are going to fall at least by 15 to 20 per cent. The supply is increasing and demand is stagnant,” said a rental broker in Narayanguda.
Pointing out that as there is no fresh demand for the rental houses, the brokers claim that the migration of Andhra employees to Vijayawada is creating huge demand-supply gap for houses in the city.
Interestingly, on the other hand, the house owners are also not willing to reduce the rents at this point of time and even prepared to keep the house or apartment vacant though paying maintenance charges for the apartment, expecting decent rent.
However, the brokers argue that the owners need to reduce the rents at some point of time, only then it is possible for them to let out the house. “They (house owners) may have to change, as they are just paying maintenance, which may become burden in the months to come.”
For instance, according to a property broker in Uppal, a house owner had to reduce the rent for his two-bed room apartment, as he found it costly to pay maintenance of Rs 2,000 per month for three months. “Earlier he (owner) used to get a rent of Rs 7,000 per month, he now get Rs 5,000 per month. He saves maintenance cost.”
Confirming the trend, a resident in Gandhi Nagar area said, “The numbers of to-let boards are increasing in the locality and most of them are vacant for over two to three months.”
Normally, the apartments will be available for rent during summer season when the government and bank employees will get transfers. But now with Andhra employees are being relocated to Vijayawada, the
supply of houses is increasing, CM Prakash, an apartment owner, said. The trend is too similar in most of the locations like Uppal, Sithaphalmandi, Narayanguda, Nallakunta, Kamala Nagar, Sanath Nagar, Kavadiguda, Dilshuknagar, etc.
Even the property brokers are feeling the pinch of this phenomenon, as the people who used to buy second house as part of investment earlier, now, they not considering house property as investment option. “The rental values are not matching with the EMIs, hence, people are not willing to buy the second house, instead moving towards to other asset classes like bonds, shares etc.”
By KVVV Charya
