Tenants missing, rent on downward spiral

BHUBANESWAR: For tenants looking for houses, this is probably a good time . Go to any residential locality and there are many 'To Let' signboards. Market insiders said rent has lowered by 20% to 30% compared to what it was a year ago.
The city has added above 15,000 housing units per year over the past three to four years. However, demand has gone into a freefall because of steady decline in the number of engineering students looking for houses on rent and no significant addition of workforce because of reduced economic activities.
"After their 'to-let' had no respondents, many house owners lowered rent. But still at least 30,000 units are still unoccupied in city," said Dewa Shankar Tripathy, managing director of a firm involved in rental transactions.
Landlords, who were hiking rent by 5 to 10 per cent per year earlier, have stopped this. Housing stocks meant for rent in Patia, Khandagiri, GGP Canal Road, Cuttack-Puri Road, Sundarpada, Rasulgarh, among others, are readily available. Prime localities such as Saheed Nagar, Satya Nagar, and Kharavela Nagar too have several houses meant for rent remaining unoccupied.
"In Saheed Nagar, a descent 2BHK used to come for more than Rs 20,000 per month around two years ago. Because of the low demand, Rs 15,000 is the asking price there today. In newer localities and on the outskirts, 2BHK houses are available at a rent below Rs 7,000," he said, adding tenants have a wide range of options, from choicest localities to furnished rooms.
"I was expecting a rent of at least Rs 8,000 per month but it's fetching me just Rs 5,000. It is difficult to pay the EMI of my housing loan," said Amit Barik, who recently took possession of a house in Jagannath Nagar near Jharpada, which he had booked three years ago.
"We are planning to move to a better locality as rented houses are easily available these days," said Sumita Kanungo, a homemaker in Sundarpada.
Market insiders said seats in technical colleges remaining vacant has had a direct effect on the rental market, as they comprise a major share of the floating population seeking houses on rent.
"There is no significant addition to the floating population every year because economic activities have declined. On the contrary, housing stock is going up. These were mostly bought by investor-buyers for rental purpose. The bigger the house, the lesser the demand," said Pradipta Kumar Biswasroy, president, Real Estate Developers Association of Odisha (Reda).