88% tenants looking for property within city limits as work from office resumes
The first half of 2022 has been really promising, especially for the rental segment. The real estate as a whole has shown good resilience during the pandemic with tenants wanting either to move to bigger houses or to own one as indicated by NoBroker’s annual real estate report 2021.
The 2022 half yearly report by NoBroker reveals how the sector has evolved over the last six months with professionals flocking back to their work cities in huge numbers.
About 71% of people who have responded to the survey have stated that they have already moved to their work cities, while 54% are looking to relocate either within the city or to their work city. This explains the property crunch that cities such as Bangalore, Mumbai and Pune are facing.
Inventory crunch is one of the major reasons for rent inflation which is upwards of 12% across cities. 68% of respondents have also cited that their rental budget has increased! Past few years have seen rentals hit rock bottom with many landlords reducing rent as observed in last year’s report. The last few months have however been challenging for tenants who are now having to pay a much higher price for the same properties which were available for much lesser rent during Covid. Close to 85% tenants have stated now that the prices have gone up, the maximum brunt was felt by Bangalore tenants.
Handover of projects has been delayed as construction had to be halted due to the pandemic. Over the last two years, while a lot of companies have increased the headcount of their employees, construction of projects has not kept pace. A lot of these employees (who were working from home at the time of recruitment) are looking to relocate to work cities. But there is a mismatch between demand and supply. As many as 78% people have stated that they are having difficulty find a property as per their choice.
Commenting on the same, Saurabh Garg, Cofounder and Chief Business Officer of Nobroker, said, “A lot of trends that had emerged during and because of Covid are on reverse now. For instance, people are once again looking to rent a property within the city to be close to their workplace. Inventory crunch is one of the major reasons for rent inflation which is upwards of 12% across cities. 85% of respondents feel rentals have gone up. Past few years have seen rentals hit rock bottom with many landlords reducing rent to retain tenants. The last few months have however been challenging for tenants who are now having to pay a much higher price for the same properties which were available for much lesser rent during Covid. However, this sudden surge in rent inflation should settle within the next few months. One trend that continues is demand from buyers to own their dream homes.”
Having a house that could triple up as home, office and recreational zone became more important during the pandemic regardless of how far it was from one’s office. However, now with the Covid waves receding, over 88% of tenants have mentioned that they are looking for a property within city limits.
Property purchase is on the mind for 72% of tenants as interest rates are really low. Interest rates have shot up somewhat but they are still much lower than the pre-pandemic level. Interestingly, the reasons cited for this are that EMIs are more manageable, it is difficult to find a good property to rent, and that prices are anticipated to shoot up. Close to 45% people believe that prices will go up further and therefore now is the best time to buy.
NoBroker has experienced faster closures for rentals as well as buy/sell transactions on the platform. Most urban cities are experiencing housing shortage due to massive reverse migration and low inventory. The difficulties might persist for another few months post which the situation should ease.