lovebird

Source: THE HINDU

No takers for rental flats. Rental value coming down


More facilities for the same rental value
Aloysius Xavier Lopez
Landlords preferring to deal with tenants on their own

“Many people are opting for smaller two-bedroom houses at a lower rent”
CHENNAI: Summer is usually the time when house rental business is brisk. But this year it is not so.

The increasing number of ‘To Let’ boards in various residential areas in the city seems to be one of the facets of the state of residential property rentals.

T. Joseph Madhavaraj, who runs a house broking agency in Vadapalani, said there were large numbers of houses with ‘To Let’ boards in the area.

As brokers are finding it difficult to find tenants for the residential units, landlords have started to display such boards.

“Rentals are remaining the same despite a limited supply of high-end residential units in some areas. However, tenants are able to get high-end residential property with more facilities on the same rent they paid last year,” said Ramesh Nair, Managing Director-Chennai, Jones Lang LaSalle Meghraj.

One of the reasons for this is the reluctance of the landlords to reduce the rental value of their residential property, says S. Jayaseelan, a broker.

Mr. Jayaseelan adds that Thiruvanmiyur is one of localities where a large number of houses are sporting ‘To Let’ boards.
Many of the houses are continuing to remain vacant in various parts of the city, say brokers.

The number of enquiries has reduced drastically, says Mr. Jayaseelan.

However, many of the enquiries are from tenants who are paying higher rent in order to find a house with lower rental value, he says.

Dhadresh P.Mehta, President of Chennai Real Estate Agents’ Association, says, “There is a slowdown in the market as more number of companies are becoming cost conscious.”

Generally in many areas of the city the absorption has dipped by more than 30 per cent, he said.

According to brokers high-end rentals are not encouraging either.
As company lease transactions are being renegotiated and the vacancy levels are continuing to rise, growth of rentals of many high-end residential units which had experienced a steep hike in the past has stopped.

In areas such as Alwarpet, Adyar and Nungambakkam the rental values for high-end residential units have stagnated, according to brokers.

Relatively affordable
In areas such as T.Nagar residential rentals have become relatively affordable. The poor response to the methods used by landlords to find a tenant has been one of the reasons, say brokers.

Residents say the situation is similar to the condition in the city a few decades before with a large number of ‘To Let’ boards.

The slump in the IT sector has reduced the number of people looking for new rental accommodation using advertising tools of new media. “Many people are opting for smaller two-bedroom houses at a lower rent,” said Mr.Jayaseelan.

The number of people willing to settle quickly for high rent homes has come down as a consequence of less recruitment and salary cut in some private companies.

People, both landlords and tenants, take unusually more time to decide on residential rentals and growing number of ‘To Let’ boards is a clear reflection of this, he said.

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NO doubt. With more supply of flats and less demand due to IT down fall, RE will be further falling as a net effect

ks2071746

Dear friend,

The IT downtrend has really affected the RE market as also the rentals. We may see some improvement only after another 12 months minimum. This is the time to look for own use flat in some selective projects of good quality contruction by decent builders in most convenient areas and do hard negotiations, not necessarily for pure investment purpose.

ks2071746

abk

true, the 'sale of the century' may not last a lifetime.you can pick some real bargains in this juncture.
we are already seeing some signs of recovery in the stock market(india) some say it is a bear rally but some say their is value in indian stocks,mid term.if you purchase in the estb locality as KS says the returns would overtake FD's in the long term.

Natarajg007

Rentals come down? Hmm that sounds interesting since all known relatives seem to have doubled their rentals! Strange are the ways of silly bears.

ks2071746

Dear friend,

It is undisputable that the rentals have come down in many cases and in some cases the usual annual increases are not happening. The very fact that there are many- to let boards- seen in the houses now, mean there are many houses/flats coming up for rentals which otherwise were not to be seen in the last 2 years or so, as mostly by contacts/references, the flats getting vacated used to be booked with increased rentals.

ks2071746

strongsville

Rentals came down??? Silly bears. My relatives have tripled their rental and making fortunes now.

Nats, question to you. Can you find out from your relatives how often they increase the rent?

My relatives increase the rent by 8% every 2 weeks. Let me know if its advisable?

Natarajg007

Oops only 8% per 2 weeks? My relatives increase it 800% every 2 minutes!