🤑 Bengaluru Rent Prices Sky High: Why?

Getting a flat in Bengaluru right now is like getting into an IIM: super difficult and super expensive. Why? ReadOn!

Job hunting is difficult. 

Clearing tough exams, building the best resume, passing endless rounds of interviews: all to land that one job.

But even after you get the job, it's not time to celebrate. Because…

Say hello to endless house-hunting!

House hunting in Bengaluru is no less than job hunting - you need a good resume, a good LinkedIn profile, and of course, truckloads of money.

Yup, rent in the city has doubled since the start of 2023.

But why? What's going on? 

ReadOn! 

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📈 Why is Rent in Bengaluru Rising? 

The major culprit behind the high rent is Covid. 

Yes, it still feels good to blame things on Covid. 

When Covid happened, everything shut down, including offices. 

So, everyone took their work home. 

No, not to their rented flats in Delhi, Bengaluru, and Mumbai. 

But to their hometowns, to their families with good home-cooked meals.

And once people were home, they did not want to go back to the office. 

To the insane commutes filled with traffic and pollution, to the meetings that could have been emails.

Result?

All the rented flats were left empty.

Two years later, offices have had enough.

They want to go back to the age-old way of working, in physical offices.

They want to go back to conducting physical brainstorming sessions that don’t have to be ‘scheduled’.

So, hordes of employees from all over India are migrating back to the financial hubs, the job-giving cities. 

While employees may not want to shift, landlords are eagerly waiting for them.

After all…

You see, these landlords had paid a lot of money to set up these houses. 

And they had to bear the cost of EMIs even when these houses were empty.

So now, they want to earn back every penny. 

Result?

Sky-reaching rents.

Bengaluru's rental yield is currently the highest: 3.9%! 

Rental yield is like the money tree of the real estate world - it's the rate of return from the rental income from a real estate investment.

Gross rental yield = (annual rental income/property value) x 100 

That means for every hundred rupees that landlords paid to buy the house, they get Rs. 3.9 as a return. 

Woah, what's so special about Bengaluru? 

Well, the weather, the pink blossoms and mainly the unavailability of flats.

You see, Covid stalled a lot of construction, so fewer flats than usual are available in Bengaluru. 

Bengaluru added only 13,560 residential units, a 3% rise since last year.

Mumbai, on the other hand, built  55% more units than last year!

Yup, that’s the kind of growth needed.

But because Bengaluru did not see this growth, rents are now growing.

But rents aren’t just rising for vacant apartments.

Landlords are also increasing the rent of current tenants.

They know there is demand in the market. If their current tenant doesn’t agree to the price hike, someone else will.

And since they’re spoilt for choice, they’re ensuring they get the best of the renters.

That’s where the CV and the LinkedIn profiles come in. 

Yes, if you want a flat in Bengaluru you may have to present your CV to the landlord and even your LinkedIn profile. So, you better get active on LinkedIn again.

Now, all of this is putting a lot of pressure on renters.

They have to travel for hours to find a decent house with decent rent.

Instead of being more productive by working from the office, employees are getting super stressed and losing focus!

So, what can be done to improve this? 

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🔍 The Disastrous Solution 

Well, the solution seems simple enough: build more buildings.

Once supply matches demand, prices will come down.

Easy-peasy, right?

Wrong.

You see, Bengaluru is already super super crowded.

Creating more buildings is also leading to ecological problems like floods.

Last year, Bengaluru was submerged in flood water for days, leading to inconvenience, power cuts and damages to property.

That’s because buildings have now been created on lake beds, on old paddy fields, and even on storm drains.

There’s nowhere for the water to go.

So, we need to scale down the building of the concrete jungles.

Umm, where will people stay then? And where will they work?

Well, the root of this problem is increasing urbanisation.

Companies set up their offices in large metros, causing the rest of India to flock to them.

Meanwhile, other parts of the country remain empty and underdeveloped.

Yes, Bengaluru, Mumbai and Delhi are great. But currently, they’re choking: on water, polluted air and on humans.

And what quality of life can these ‘great’ cities provide if they are brimming with people? 

At the other end of the spectrum, empty towns and cities are stuck in time.

With people hardly living in these cities, there’s no one to earn and spend. 

Result? No or little growth.

It’s high time we start paying attention to our ways of development. 

It’s high time we start paying attention to the consequences of our own actions.

Let’s focus on sustainability by creating more employment opportunities in small towns and cities as well.

How do you think we can achieve this? 

And if you want us to cover the problem of rising urbanisation in detail, just ask! 

We’re here to serve!

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