Bengaluru billionaire Nikhil Kamath calls sky-rocketing rents a 'short-term phenomenon'

Amid an ongoing debate on which is a better idea -- to buy a house or to rent it -- as rents double in Bengaluru, Zerodha co-founder and billionaire Nikhil Kamath on Thursday said that the sudden spike in house rents is a short-term phenomenon.

He also shared a few infographics on Twitter which explained that the surge in rents is caused by a sudden demand for rental accommodation in cities such as Bengaluru and Pune which have been witnessing a large return population with major IT firms and other companies calling their employees back to office.

Under such circumstances, highlighting the difference between renting and buying a property, Nikhil Kamath said, "Looks like a short-term phenomenon; as long as you can rent at 3 percent and housing loan rates are over 8 percent, 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."

Rents in India’s technology hub of Bengaluru have nearly doubled since the start of last year, making it the country’s hottest residential market, as per a report in Bloomberg. Landlords in the city, often referred to as India’s Silicon Valley, now charge the highest proportion of their property’s value as rent, edging out financial centre Mumbai, according to data from market researchers.

Even the infographics shared by the Zerodha co-founder show that house rent in Bengaluru surged as much as 57 percent for normal 1BHK flats in the last year. In contrast to the demand for rented spaces, the number of unsold residential properties is at an eight-year low. On the other hand, the post-Covid era has emerged as one of the best times for people looking to buy a property. 2022 witnessed a decade-high demand for residential properties, the data shared by Kamath stated.