Bangalore is the fastest growing city in terms of economy, competing with top cities in the world like Tokyo and Beijing, as per Oxford Economics. In 2023, the rates of flats for rent in Whitefield, Bangalore, have increased significantly, worrying engineers and other working millennials seeking residence in the city. The individuals typing "house for rent near me" are finding homes out of their budget. Software engineers seeking 1BHK flats for rent in popular localities like Maithri Layout in Whitefield and others are not finding sustainable homes they can afford.
Many reasons might have led to the rise in rental prices in popular localities like Whitefield, Koramangala, and Sarjapur. The rental struggles of the tenant, reasons for rent hikes, and more will be explained in the upcoming section of the article.
One of the main problems the tenants are facing is the skyrocketing rental prices, especially in IT Hub residential areas like Maithri Layout in Whitefield, Sarjapur, and Bellandur. The rental value has increased in 2023 compared to last year. There are many possibilities as to why landlords are increasing the rent by almost 30% of the cost. When new-age tenants search for "1BHK for rent near me" or "house for rent near me," they do so with expectations different from Covid-19 times. The trends were much different during the lockdown period, where the working trend shifted from Work-from-office to Work-from-home. Today, it is shifting back to Work from Office. The following are the reasons for rental value hike and issues tenants face in finding a home in Bangalore in 2023:
The increasing requirement for apartments in the IT hub of Bangalore is overshooting the availability of homes in the area. The new residential units added are only a 3% increase compared to 2022. These units are filling quickly, whereas double the demand is coming in. The inflow of migrating working professionals constitutes over 50% of the population in dire need of accommodation. During the lockdown in 2020 and 2021, the construction industry had halted, creating scarce supply. The demand which went home is now suddenly coming back, creating a huge gap in the rental market. It has allowed landlords to hike prices and lease their homes only to individuals who can afford the high rent.
During the pandemic, most big companies, like Amazon, Wipro, SAP, etc., asked their employees to work from home. These individuals returned to their hometown to work remotely, increasing vacant homes in Bangalore. The landlords had to reduce their rental rates and incur a big loss. Now that the workforce has been asked to return to the office, there is a spike in demand for homes, an opportunity for the landlords to regain the revenue lost.
The primary factor affecting the tenants is the sudden hike in the rental rates. The landlords in Bangalore are gaining rental yields of around 3.9%. The rent has increased by almost 40% in the last year, making it difficult for engineers and other working professionals to find a residence in the city. Despite adding 13,560 resident units in Bangalore, there is still a mismatch between the demand and the availability. In Whitefield alone, hundreds of people look for '1BHK for rent near me" and are not finding homes in the reasonable price bracket. The average rent of a 1BHK or a 2BHK home has shifted from INR 25,000 to INR 40,000. The price can go up to INR 60,000 in some in-demand localities.
Over 350 IT companies in and around localities like Whitefield, ITPL, and Koramangala. There is an increase in demand for homes in these localities, making it difficult for tenants enquiring about the 1BHK homes for rent in Whitefield, Bangalore, to find a home. It increases the value of properties within a commutable distance from the workplace. Therefore, rents of properties in demand around these localities have increased significantly.
Apart from the high rent, there are other issues individuals are facing in 2023 to find a home in Bangalore. Some landlords make decisions based on their personal biases when leasing their property to an individual. Most do not prefer to give their property to unmarried individuals, while others want the tenant not to cook meat in the house. Some landlords rent their houses to potential tenants willing to pay a larger price than the quoted price. It makes the other applicants feel like it was an unfair trade, and the opportunity was taken away. Many landlords are asking for the resumes and LinkedIn profiles of potential tenants to screen the list of incoming applications. Some people ask for the tenant's marks cards and refuse to give them a flat if they have scored below 90%. Working professionals and students seeking residence in the city are finding these demands unreasonable. The stress of house-hunting and the landlords' unreasonable demands affects their mental and physical health, making the process more taxing.
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