Will rents in Bengaluru cool off after the spike? Zerodha's Nikhil Kamath shares his view

Nikhil Kamath, billionaire founder of Zerodha, feels that the spurt in rents in some cities could be a short term phenomenon. Bengaluru in particular has been in limelight with many taking to social media to highlight the spike in rents. Analysts say many people have shifted to job centres like Bengaluru and Pune as offices have started to open up but supply has not been able to provide for the surge in demand, leading to the surge in rent.

" Looks like a short-term phenomenon; as long as you can rent at 3 per cent and housing loan rates are over 8 per cent, this won't work. If I had to bet on house prices going down vs rent going up to reach equilibrium, my bet is still on the former," Kamath tweeted while also sharing a few infographics.

One of the infographics shared by the Zerodha co-founder showed that house rent in Whitefield (Bengaluru) surged as much as 57% for a normal 1 BHK flats in the last year.


According to the infographics shared by Nikhil Kamath, the rising rent is due to imbalance in the equation of demand and supply. Post-covid, there has been a demand revival but supply has not able to catch up.


"Demand for residential properties is at a decade high now. Unsold residential properties in India in 2022 are at the lowest since 2014. Owing to covid and interest rate hikes, few builders completed their projects and new launched have failed to match the demand," one of the infographics says.

Bloomberg, citing data from market researchers, recently reported that landlords in Bengaluru now charge the highest proportion of their property’s value as rent, edging out financial center Mumbai. Bangalore is now the top Indian city for rent yield with 3.9%.

Bengaluru is home to over 1.5 million workers including those for global firms like Alphabet Inc.’s Google, Amazon.com Inc., Goldman Sachs Group Inc. and Accenture Inc.