Bangalore, often referred to as the “Silicon Valley of India,” has become a bustling metropolis and a magnet for job seekers and tech enthusiasts from all corners of the country. The city’s rapid growth and development have undoubtedly made it a hub of opportunities, but it has also led to a significant increase in living costs, particularly high rents. In this blog, we delve into the factors contributing to the soaring rental prices in Bangalore.
Haven’t you lately been witnessing that the prices of rent in Bangalore are skyrocketing? The landlords are charging it higher than in other metropolitan cities in India. This rise is causing a lot of stress for the tenants because staying in the city has become harder. Although the spaces have been occupied by highly paid employees, this is a matter of stress. To the extent that they are unable to work. But why are rents so high in Bangalore?
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The Reasons Behind High Rents
In the residential zone of Bangalore, rental space is up by 15 to 30%. That’s true because of the high demand in the city. The interest is in the 2 BHK apartments, which are A-grade. By seeing the rate hikes, tenants have given thought to buying rather than renting.
Recouping the lost revenue
During the pandemic, the situation demanded that the landlord give houses for rent at a lower price. Now that the tenants have returned, the sentiment is to recoup the lost revenue. That makes up for the landlord’s loss, hence the hike. But that doesn’t put the tenants in a fair situation.
The lesser supply in Bangalore’s rental space
During the pandemic, construction work merely slowed down. The number of new residential units added in Bangalore at the beginning of the year was lower compared to Mumbai. The shortage of supply is indeed creating demand, which is no doubt why the prices have shot up.
In need of a greater lifestyle
With the increase in workload, the tenants are looking to move to better places for comfort. But their preferences are such that the supply isn’t meeting their demand. Although demand is high, the rate hikes are at par with market prices. Due to no hike for almost 3 years, this sudden surge looks absurd to the tenants.
It all comes down to a thought for a tenant after this point. “The house we vacated during COVID is now available at a hiked price of up to 15 to 30%”. It’s incomprehensible to any tenant out there to understand why rents are so high in Bangalore.
How much rent can a landlord increase in a year?
The landlord can indeed increase the rent. There are certain norms that one needs to follow as per the rules set in India.
Commercial buildings
The landlord can increase the rent by 5 to 8% every year.
Residential buildings
The landlord can increase the rent by 10% only after the expiration of the lease agreement.
A tenant must keep a tab on the rental terms in the agreement before agreeing to them. As per Section 106 of the “Transfer of Property Act, the tenant must be well informed before the price hike in a notice. In the case of any improvements made to the property through alterations, the landlord gets to increase the rental price. Although the increase in price should not be more than 15% of the cost incurred to make the additional changes,
The right of a tenant in a Bangalore culture
Rights such as:
- Right to access essential services
- Right to pay a fair rent
- Right against unfair eviction
They are meant for the tenants to live peacefully. As per the Rent Control Act of 1948, it is mandatory to first sign a written agreement of tenancy before confirming the accommodation. Only if the contract is valid are the duties and rights applicable; otherwise, they can’t be protected.
The rule of eviction says that the tenant is not evicted as long as he pays the revised rent. And the landlord must give three months’ notice in case they wish to increase the rent.
The agreement must have the maximum hike agreed upon mutually to avoid unfair hikes. If the landlord asks you to leave, they can’t do so without 15 days’ notice. Until then, according to the Model Tenancy Act, the tenant must receive the water and power supply. The security deposit must be returned within a month of vacation after adjusting the dues, if any.
The responsibility of paying for utility charges is the tenant’s sole responsibility. Whereas the renovation or fixing of the damages is the landowner’s responsibility. This allows the tenant to live undisturbed.
Why are many rental spaces vacant?
In the working hub of Bangalore culture, people mostly like to stay in proximity to the office. That reduces the time to commute while also looking out for accessing good amenities. But most of the residential properties in Bangalore don’t meet this criteria, and hence they are vacant. Some compromise accessibility for affordability, and vice versa. Though 77,260 units are vacant, the supply doesn’t meet the changing demand criteria of the residents.
Wrapping up
You must now be aware of why rents are so high in Bangalore. The sudden spike in rents is seen after the impact of COVID. The loss of revenue was unexpected to the landlord at the time. Similarly, the rise in rents is unexpected to the tenants right now. Be that as it may, the interview process for a tenant is unfathomable. The change in rental prices is not just in the houses but is the same in PG as well. With that being said, real estate experts say, “This is about the market correction due to stagnation for almost two years.
Frequently Asked Questions
Why is rent increasing so much in Bangalore?
Why are flats so expensive in Bangalore?
What is the rent crisis in Bangalore?
Why is Bangalore getting so expensive?
