India's IT sector employs over four million people
As IT companies slow down hiring putting annual pay rise for employees on hold, house owners in IT hubs of the country such as Bengaluru, Hyderabad, Chennai, Pune and Noida-Gurgaon in the NCR may reduce rentals in the next three quarters, industry body Assocham said in a report. The estimated drop in Pune can be as much as 20 per cent in Pune over the next three quarters, the research report by Assocham or Associated Chambers of Commerce and Industry said.
"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. Gurgaon is holding up because of the demand push from the national capital region (NCR)," it said.
House owners in Bengaluru, known as India's 'Silicon Valley', seem to have done a reality check and are accordingly slashing the rentals while offering better amenities to attract tenants as the industry goes through a massive upheaval. "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".
Assocham's latest estimates reveal 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. However, without the usual inflow of techies pushing the demand for rentals in Bengaluru, that scenario has totally changed.
Even if these companies may be adding on a net basis, new jobs are not being added in an enthusiastic way, adds the paper.
"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 D S Rawat said while releasing its paper.
The study showed that IT and ITeS (IT-enabled services) professionals aged 30 to 45 years and above earn between Rs 20 lakh and 50 lakh per annum on an average. Typically, they pay even up to Rs 50,000-1.5 lakh per month as rent.
There is another a range paying between Rs 15,000-Rs 35,000 and upward. All these segments are witnessing easing of the rentals.
The markets for real estate has gone down in major micro markets owing to a combination of factors, the research showed. With a large inventory of ready flats which would be available for use in the next few months, young professionals will have a wider choice of housing options at lower rates. (Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)