Rent crisis grips India
Not many people take landlords to the courts or the police.
House rents, which remained frozen in the pandemic period, started shooting up across cities in India in mid-2023 by 40-50%. The conventional rate of annual hike is 5-10%. Even after a year since rents started zooming, they haven't stabilised. What has been added to that chapter is landlords employing tricks, like shortening lease agreements, and issuing eviction threats to extract the most from tenants.
House rents, stagnant since the pandemic, started zooming from mid-2023 by up to 50%, and are still surging. Even after a year, house rents haven't stabilised, and landlords are shortening agreement duration and issuing eviction threats for further unusual rent hikes.
House rents stagnated from 2020 to 2022 when employers allowed work from home (WFH) as the Covid pandemic raged across the world. As employers called back staffers to work on site, rents went up. As the newly opened world saw revenge travel, revenge shopping and partying, it seems revenge rent-seeking also became a phenomenon with landlords trying to make up for the lost period.
Rental values in seven Indian cities, including Bengaluru, Delhi NCR, Hyderabad, Mumbai Metropolitan Area (MMR), have skyrocketed by as much as 72% between 2021 and the first half of 2024, outpacing the growth in capital values, according to an ANAROCK Research report.
One is to ask tenants to vacate the flat. The other is to offer them shorter leases of around 7 months, against the standard 11 months or 2 years. Then, there are brokers who help landlords broker a better deal and give short notices to tenants.
Another tactic is a clause in the lease wherein a tenant can only supposedly hold the flat till it is kept in a "proper condition". This could be subjective and landlords can use this clause to ask a tenant to vacate the apartment.
Not many people take landlords to the courts or the police. As this is even more time-consuming and people fear how it might unfold. The best option is to pay the landlord or vacate the flat.
The rate at which rents are increasing outpaces the appreciation of the property's price itself. For example, rental values in Kolkata's EM Bypass area saw a 46% jump, but the capital value grew by just 15%, according to the Anarock report. In Chennai's Pallavaram, rentals surged by 40% while properties appreciated by a modest 18%, it suggested.
Not just that, most tenants are seeing an increase in rents, the rate of which is much higher than their annual increments. As tenants suffer due to high house rents that show no signs of stabilising, landlords are employing several tricks like shortening of lease agreements, inserting subjective clauses and issuing eviction threats to fleece helpless tenants because of a scarcity of housing units in most metro cities. There seems to be no end in sight to the misery of those who don't possess houses in cities where they work.
