Rent slump in times of real estate boom Bhubaneswar
Oct 05, 2012
Source : The Telegraph
A house in Bhubaneswar awaits tenants

 

Bhubaneswar, Oct. 4: House owners in the capital are renting the air for tenants, but there aren’t many takers .
 
The number of people seeking houses on rent has dropped because of continuing real-estate boom in several parts of the capital.
 
The rent landlords used to get from tenants has also dipped in areas such as Patia, Sundarpada, Gothapatna, downtown Patrapada, Ainginia, Pahala, Uttara, Dumduma and Brahmeswar.
 
Even independent houses in posh areas such as Saheed Nagar are either lying vacant or the owners are compelled to let them out at low rates.
 
Nrupa Kishor Pattnaik, a house owner in Pokhariput, said till last year all houses around Pokhariput DAV Public School were occupied. But this year, many houses were lying vacant.
 
A year ago in Pokhariput, the owner of a two-bedroom independent house used to earn between Rs 9,000 and Rs 10,000 in rent every month, but now it has dropped to Rs 8,500.
 
Dillip Sabat, who works with a private firm at Patia, said: “Recently, four of our colleagues rented a four-bedroom flat for Rs 7,500. The house owner initially wanted Rs 10,000, but later agreed to rent it out for Rs 7,500. Another friend, who took a three-bedroom flat for Rs 9,000 last year was surprised to find similar accommodations being rented out for less than Rs 8,000 this year.”
 
P.K. Biswasroy, president of Real Estate Developers’ Association of Odisha, said: “Rents have fallen for flats without modern amenities and good communication facilities. However, this is not the case with flats at prime locations.”
 
Stating that the current situation was not “alarming”, he said the real estate developers in Bhubaneswar had withstood the 2008 recession and this year’s market condition was not that bad.
 
However, he admitted that there was a drastic fall in the rent potential of independent houses in the Rs 12,000 to Rs 40,000 category. “We run a premises in Saheed Nagar and for past several years, the monthly rent continues to be Rs 20,000. This shows that the market rate has remained static for such properties in posh localities. So, for independent houses, there has been no rise in rent across the city,” he said.
 
Vice-chairman of Bhuba-neswar Development Authority Vishal Kumar Dev said that they had received information regarding a slump in real-estate prices across the city.
 
“Though this has been linked to many factors such as a slow growth in the IT sector and mining setbacks, the fall in rent in many pockets might also be related to the availability of flats or houses with better amenities in better localities. This is, in a way, a better development index in the housing sector,” Dev said.
 
He estimated that more than 20,000 dwelling units have come up around the city since 2007.
 
Chairman of the Odisha chapter of Confederation of Real Estate Developers’ Association of India D.S. Tripathy said: “There is a fall in rent in some pockets with so many projects coming up simultaneously.”
 
However, Tripathy said there was no “fall” in real estate price. 
 
A Bhubaneswar Development Authority official told The Telegraph that flats in prime areas such as Saheed Nagar, Nayapalli, Satya Nagar and Surya Nagar were still commanding good prices.
 

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