Amid huge layoffs by IT companies, IT-centric companies are witnessing pressure on rentals of homes in cities such as Bengaluru, Hyderabad, Chennai, Pune, Gurgaon and Noida, which may decline to the extent of 10 to 20 percent over the next three quarters, said Assocham.
The worst hit was Bengaluru where the fresh inflows of young professionals is declining over the period as they constitute a major chunk of rental home seekers, which is fast bringing down the rentals with many house owners in the India’s ‘Silicon Valley’ slashing their rates, the study found after survey of owners.
“Even in the existing rental deeds, the tenants are seeking better options and no hike in the monthly outgo, quoting the adverse industry outlook. With better options, the market is tilting in favour of the tenants, especially those paying above Rs 50,000 per month,” said the report.
Owing to increase in layoffs, the rentals in Bengaluru, Chennai and Hyderabad may come down by 10 to 12 percent while in Pune it may see 20% decline, said the report. In delhi NCR region, Gurgaon and Noida rentals will see a decline of up to 10-15 percent, the study said in its forecast.
Currently, the IT sector employes over 40 lakh people, who are mainly spread over the five cities studied for the report, said Assocham in its report. “The IT and other services like financials are among the sectors which pay well. Besides, the age profile of these employees is quite tempting for the marketers. They are good spenders and want good life,” noted the report.
While rentals are seeing a decline in individual homes, the aprtments and gated communities are seeing the need for more such secure homes for the techies who work as couples and go to office in odd hours. “These factors kept the markets for rentals pushing up, especially in gated and well-equipped housing complexes and societies in Bengaluru, Gurgaon, and Hyderabad,” said D.S. Rawat, Secretary General, Assocham.
Meanwhile, techies in Bangalore have approached the state IT minister for intervention to stop the layoffs in several companies of late to trim the expenses. They had asked the government to ensure better deal while laying off the staff or deferring the move by few more months instead of effecting it overnight making lives of families miserable.