MUMBAI (CU)_Since the beginning of the pandemic in the first quarter of 2020, India’s rental market has been underperforming, with a 5 to 15 per cent decline registered across key markets in the country following the viral outbreak. It was only in the second half of last year that the sector started to demonstrate signs of stability as employees were expected to return bank to office amid a fall in COVID infections. But then a third wave led by the Omicron came in, restraining the ongoing recovery.
Samantak Das, the chief economist at JLL India noted that following the second wave of the pandemic, the country’s rental housing market had started witnessing a steady recovery, with a 5 to 7 per cent uptrend in certain region, as many began returning to office as a result of aggressive vaccination campaigns. He added that the Omicron-led third COVID wave may not lead to a sharp decline in housing rentals, although they may stagnate before easing marginally over next two-three months due to extension of the work-from-home model.
During the final quarter of last year, top companies across some of the major cities in India had begun ramping up operations and were expected to have half the strength under hybrid work model by mid-2022. Meanwhile, students had also begun returning to school, before the third wave, which suspended reopening plans until March.
“We had seen people opting for organised rental markets or co-living spaces, especially young couples, due to hygiene and safety issues. There will be an impact on the rental homes that cater to families if the third wave spreads,” Suresh Rangarajan, founder of Colive, a network of fully- managed rental homes, said. According to Shabbir Pasha, a Bangalore-based property broker, there are many homes which have been vacant for over six months, even as landlords are willing to reduce the required deposit. “The third wave will not only delay the recovery but also increase vacancy,” he said.