Home rents in gated communities across Bengaluru are on the rise, increasing by up to 40%. The price increase has been triggered by the high demand for apartments in gated residential societies, according to NoBroker.com.

Mr. Kulkarni, who owns an apartment in a gated society in Bellandur, was inundated with tenant inquiries within just a few minutes of listing his property on NoBroker.com. His apartment was eventually rented out to an IT professional working in a nearby tech park at a rent appreciation of 25% – all within 2 hours of listing.

Past two years saw rapid urbanization in IT cities such as Bangalore and Pune. Students who graduated during the two years of Covid entered the job market wherein they joined the workforce but were working from home. Now, as offices have opened up, they are relocating to their work cities. Also, professionals who were working in these cities had gone back to their hometowns due to prolonged work from home and are now back. A lot of start-ups in Bangalore have increased headcount of employees during the pandemic years. These professionals too are moving to Bangalore as work from home is discontinued. While there is sudden demand from these three segments, the supply has not kept pace as construction activity was muted for almost two years.

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Another homeowner, Mr. Deshpande, was surprised that tenants were offering rents higher than the asking price of his apartment on Sarjapur Main Road in what often resembled a bidding war. He eventually closed the deal within 6 hours of listing the property on NoBroker.com, at a monthly rent amount around 20% higher than what he had originally asked for.

Speaking on the development, Amit Kumar Agarwal, CEO and Co- founder, NoBroker.com, said, “The overwhelming demand for apartments in gated communities in Bengaluru has come from professionals freshly out of college, professionals relocating from other cities to Bangalore, and professionals who had moved to their hometowns due to prolonged work from home and are now flocking back to Bangalore. Gated societies have always been a preferred choice for most people due to the conveniences they offer. But given the fact that construction activity came to a grinding halt during Covid, the supply of new constructions has not matched up to the demand. Traditionally, rents increase by 7-8% in a year. But this year they have increased from anywhere between 15% and 40%.”

Listings in gated societies are in such high demand on the platform that almost all properties get rented out within 5-6 hours, especially those located in East Bengaluru or close to the IT corridor, he said.

In Adarsh Palm Retreat, Bellandur, for instance, 3BHK apartments with monthly rent in the range of INR 45,000-55,000 in 2021 are now attracting monthly rents of INR 65,000-75,000. Similarly, 2BHK apartments in another gated society, Raheja Residency, in Koramangala are now attracting a monthly rent of INR 50,000-55,000, as opposed to the INR 35,000-40,000 that they were fetching just a year ago.

The average rental yield for such properties along areas such as the Outer Ring Road and Sarjapur Main Road has also registered a significant increase, growing to 4-5% as compared to the 2-3% that they secured before the pandemic.

“What is most interesting about this trend is that it is not a localised phenomenon but one that is playing out across all major cities in India. More and more urban residents now value their living experience over other considerations such as affordability,” Agarwal added.