HOME > BUSINESS > IT woes to bring down real estate rentals in Bangalore, IT hubs

IT woes to bring down real estate rentals in Bangalore, IT hubs

With IT sector witnessing subdued sentiment amidst pressure on hiring and annual pay rise for employees, the country’s software and services hubs such as Bengaluru, Hyderabad, Chennai, Pune and Noida-Gurgaon in NCR are expected to see 10-20 per cent reduction in the housing rents over the next three quarters, according to an ASSOCHAM paper.

“IT and ITeS professionals aged 30 to 45 years and above, earn between Rs 20 to 50 lakh per annum on an average and typically pay even up to Rs 50,000-1.50 lakh per month as rent, in case they do not own their flats for self use. There is another a range paying between Rs 15,000-Rs 35,000 and upward. All these segments are witnessing easing of the rentals,” said the paper.

Unlike in the past when the fresh inflows of young professionals were pushing the demand for rentals in Bengaluru, the house owners in India’s ‘Silicon Valley’ seem to have done a reality check and are accordingly slashing the rentals, while offering better amenities.

“Going forward, the rentals may ease at least by 10-15 per cent in Bengaluru, Chennai and Hyderabad, while the decline may be steeper, up to 20 per cent in Pune, in the next three quarters. Gurgaon and Noida are also witnessing a correction in rentals up to 10-15 per cent,” the industry association said.

“Gurgaon is holding up because of the demand push from the national capital region (NCR).”

This should come as welcome news to salaried people in these cities. Rents have increased by around 10% per year in most cities in India, partly because of the average increase of 15-20% in the value of the property every year for the last 10-15 years.

A policy of easy money by the US Federal Reserve starting about ten years ago has pushed the prices of most assets across the world into unchartered territory. While this has been ‘good’ for the owners of those assets, it has caused pain to those with fixed or salaried income as the assets were pushed out of their reach.

The US Federal Reserve is now starting to wind back its policy and suck out the estimated $3.5 trillion back from the market. Stock markets and real estate prices in India are expected to be impacted going forward.

A slowdown in IT services business, which accounts for about 10% of India’s GDP, is also pushing down demand for real estate, though NRI investors continue to be present in the Indian market.

According to the ASSOCHAM latest estimates reveals that while the IT sector continues to employ over four million people, mostly in the four to five big cities, the hiring growth has subdued.

“Earlier, the biggest of the IT firms would add tens of thousands of new employees every year along with liberal sops for the existing staff. That scenario has totally changed. Even if these companies may be adding on net basis, the new jobs are not being added in an enthusiastic way,” adds the paper.

“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”.

“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. These factors kept the markets for rentals pushing up, especially in gated and well-equipped housing complexes and societies in Bengaluru, Gurgaon, and Hyderabad. There is certainly a pause visible”, ASSOCHAM Secretary General Mr D S Rawat said while releasing its paper.

In any case, the markets for real estate has gone down in major micro markets owing to a combination of factors. With a large inventory of even ready flats which would be available for use in the next few months, the supply for the rental markets would further improve.

Follow ULTRA.news
Wipro opens Artificial Intelligence research facility in Israel University IT and outsourcing services provider Wipro said it will use students at Israel's largest university to jointly conduct research into artificial intelligence.The company inked an agreement with Tel Aviv University, Israel's largest institution of higher learning which is home ...
Godrej Properties announces new projects in Bangalore, Gurgaon Real Estate developer Godrej Properties said it kicked off two new projects -- both residential apartments -- in Gurgaon and Bangalore.The Gurgaon project is is of 98,000 square meters or 1.05 million sq. ft., while the Bangalore project will add 58,000 square meters of salea...
Who’s responsible for IT job losses? Ask this recruiter It's become something of a fashion to complain about job losses in India's big IT services firms.Companies like Infosys Ltd, Tata Consultancy Services, Wipro and Cognizant employ over a million people in the country, and have been letting go off tens of thousands this year as...
TCS to create apps on Siemen’s IoT platform MindSphere Tata Consultancy Services said it will create applications on MindSphere, the cloud-based, open IoT operating system from Siemens.TCS CEO Rajesh GopinathanIoT stands for 'Internet of Things' and refers to connectivity between two machines over the Internet, with zero h...
Godrej Properties enters Sohna market in NCR Godrej Properties Ltd announced its first project in Sohna in the National Capital region.The project, which involves approximately 157,000 square meters (approximately 1.7 million sq. ft.) of saleable area , will be located in Sector 33."This project will offer and will...
Tech Mahindra net profit down 31% due to rupee, poor growth Tech Mahindra said its revenue fell 0.8% quarter on quarter in the three months ended March to Rs 7,495 crore, while net profit fell 31% to Rs 588 cr.In dollar terms, revenue rose 1.3% quarter on quarter and in constant currency terms, it was up 0.9% QoQ.In dollar ter...
SpiceJet introduces self check-in for baggage in Mumbai SpiceJet has introduced self check-in for baggage at Mumbai’s Chhatrapati Shivaji domestic airport.Customers flying with SpiceJet can now simply check-in their baggage at the self-service kiosks themselves up to 45 minutes prior to the departure time."Independent of...
Demonetization hits real estate builder prices, but not resale flats – report Demonetization of 500- and 1000-rupee notes hurt the real estate sector in North India, while its impact on the sector in South India was negligible, according to Magicbricks’ PropIndex for Jan-March 2017.The report, brought out by the eponymous real estate classifieds site, ...
Cognizant says will layoff employees, close facilities this year Cognizant, one of the largest employers in India, said it will let go off some of its employees and shut down some of its facilities as part of its ongoing shift away from traditional outsourcing to 'digital transformation work'.The company said it is 'accelerating its shift...
TCS opens drone facility in the US Tata Consultancy Services said it has opened its first research lab for drones in the US at its Seven Hills Park Innovation Center located in Cincinnati, Ohio.The lab will address the rapidly expanding demand for unmanned aerial vehicles and business Solutions across industr...
Cognizant layoffs may be heading to TN labour courts as FITE preps petitions Forum for IT Employees or FITE -- an organization that claims to speak for ordinary IT workers -- said a group of employees of Cognizant Technology Solutions will approach the office of Labour Commissioner of Chennai today."Affected CTS employees file petition to the Labour ...
Larsen & Toubro Infotech changes to ‘LTI’ as it seeks an independent identity Larsen & Toubro Infotech, which started out as a unit of construction major L&T, has rebranded itself, dropping its parent's name from its own and projecting a more independent brand.The new logo reads 'LTI' in blue, bold letters with the tagline 'Lets Solve', and the new br...
Wipro rebrands itself, reveals new logo Outsourced services provider Wipro Ltd said it was undergoing a rebranding to reflect its evolving business."The new brand identity signifies a higher level of engagement and brand permission that helps clients leverage Wipro’s expertise to address their business requirement...
Bots cut Wipro employee strength by 12,000 A NASA RobotA pioneering artificial intelligence program that started getting deployed around mid-2016 has helped Wipro Ltd reduce its employee numbers by 12,000 people, the company said in its recent quarterly update."The HOLMES platform generated productivity worth ove...
Wipro refuses to reveal how many employees are being laid off Wipro Ltd, one of India's top employers, refused to confirm the exact number of people that it was laying off as part of its annual appraisal process."It is part of the internal appraisal process," company officials said, refusing to go into further details.The media ha...
Indian IT industry facing layoffs as conditions worsen, warns Assocham Trump unveiled his 'Buy American, Hire American' program yesterdayIndian IT companies are bound to see "some laying off" of their work force back home due to various negative forces impacting the industry, Assocham -- an association of various industries -- warned."With ...
After Cognizant, Wipro employees on edge as annual appraisal starts India IT growth: Nasscom Strategic Review 2016Employees of Wipro Ltd are nervous as the information technology giant has kicked off its annual appraisal process this month.The first of the several reviews, known as L1 or level 1, has been completed, and at least some emp...
WATCH LIVE – Moving towards a less visa-dependent model : TCS New TCS CEO Rajesh GopinathanTata Consultancy Services has reported Q4 revenue of Rs 29,642 cr, a decline of 0.3%, and said his company will wait and see about new US visa regulations that are scheduled to come out today.NEW VISA RULESOn new visa regulations expected...
We expected better numbers: Vishal Sikka of Infosys Infosys Chief Executive Officer Vishal Sikka said the company's performance in the January-March period was below his expectations for various reasons."It is a challenging performance," Sikka said in a post-result press conference. "We were expecting a higher number," sai...
Infosys guides for FY18 growth of 6.5-8.5% in constant currency Infosys Q4 resultsInfosys Ltd said it expects its revenue to grow by a modest 6.5-8.5%, stripped off the impact of currency movements, in the year that started this month.The street was expecting a guidance of 7-9% growth.The guidance is well below the traditional gu...
FITE urges Cognizant employees not to submit resignations FITE rose to prominence protesting layoffs at TCSForum for IT Employees or FITE, a web-based IT workers' collective, has urged employees of Cognizant Technology Solutions not to resign voluntarily if asked by the company's human resources department."If the employee resi...
Airports Authority identifies eight airports for real estate development The Goa Airport operated by AAIAirports Authority of India said it has identified eight airports where it intends to carry out commercial real estate development once the government relaxes the relevant rule.The airports are Lucknow, Kolkata, Amritsar, Varanasi, Bhubanes...
Pune, Western Maharashtra emerge as air pollution hotspots in India Air pollution, particularly levels of Nitrogen Dioxide and Sulfur Dioxide, rose sharply in towns and cities in Western Maharashtra in 2016, according to data from the National Air Quality Monitoring Programme of India.Though 2016 saw a worsening of air quality across the coun...
Reliance Jio carries 80% of traffic on next-gen Internet technology IPv6 roll-out on Jio. source:APNICReliance Jio, the new entrant to India's telecom landscape, is carrying nearly 80% of its traffic in the next-generation Internet technology, a senior official of the company said.Internet Protocol or IP is one of the languages used by machi...
Fitch withdraws ratings on Rolta India Fitch Ratings has withdrawn its ratings on India-based Rolta India Limited, after the Indian IT company said it was no longer interested in continuing with the arrangement."Fitch is withdrawing the ratings as Rolta has chosen to stop participating in the rating process. T...