After calling Bengaluru home for more than a decade, 32 year old Alisha who works in the oil and gas sector, highlights the challenges of the city’s rental system. With a modest 5–10 per cent salary hike compared to a staggering 50–60 per cent jump in rent, Alisha saw her monthly rent climb from ₹42,000 to ₹56,000, and then to ₹75,000 year after year. “The Bangalore rental agreement is biased towards landlords. There’s nothing in it that safeguards tenants,” she says. For her, the only escape from the cost trap is to leave.
While rents in India’s Silicon Valley have surged over 25 per cent since 2020, salaries have barely kept pace, posing growing concerns about Bengaluru’s affordability and long-term sustainability as a tech capital. According to data from Teamlease, the tech sector has witnessed annual salary hikes of just 8–12 per cent, with startups offering slightly better raises in the range of 12–15 per cent.
Despite the rising costs, Bengaluru continues to attract professionals drawn to its robust tech ecosystem. However, the combination of soaring rents and recent increases in utility charges is beginning to take a toll on both financial stability and quality of life.
Salary increments don’t cover rent hikes
Nethra (name changed), an analyst at a leading consulting firm, shared how most of her salary now goes towards rent. “While I got a 13 per cent increment, rent is up almost by 10 per cent. There’s hardly any room for savings,” she noted.
Nethra belongs to a cohort that has received a hike. Across sectors, however, the situation is uneven. While tech, startups and services have seen healthier compensation growth, traditional industries are lagging—highlighting a widening divide between innovation-driven and conventional sectors.
The FMCG sector has seen modest annual increases of 5–8 per cent, healthcare, despite a COVID-driven spike, has settled at 6–9 per cent growth by 2025, while construction and real estate have grown steadily but slowly at 5–7 per cent, as high living costs haven’t spurred proportional raises. Logistics has managed 6–8 per cent growth, boosted by e-commerce but unable to match tech’s pace. Even within tech, there is a stark divide. AI/ML professionals are seeing 10–15 per cent hikes, but traditional IT roles are barely moving,” according to Neeti Sharma, CEO, TeamLease Digital.
Rentals shoot up
The rental landscape in Bengaluru has seen a dramatic shift post-2020, especially in prime micromarkets. According to NoBroker’s Co-founder & CEO Amit Agarwal, occupancy in co-living spaces has shot up from 55–60 per cent to over 85 per cent recently, reflecting affordability stress. Areas like Whitefield observed a 20 per cent jump in 2025 compared to 2024, while Indiranagar, was up by 25 per cent. Marathahalli witnessed a 21 per cent increase, and in Jayanagar, the rents climbed by 15 per cent.
“In Whitefield, a 1BHK that cost ₹15,000 in 2020 is now upwards of ₹22,000–₹24,000,” noted Dharamveer Singh Chouhan, Co-founder & CEO of Zostel.
Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, added that East, North, South and Southeast micro-markets have become residential hotspots, showing consistent price appreciation and long-term investment potential.
Shift towards shared living
The rise in rentals has triggered a clear behavioural shift among younger working professionals. Co-living and shared accommodations are gaining popularity, especially among the 21–29 age group. These arrangements offer cost-effective, plug-and-play options and foster a sense of community—addressing both financial and social needs.
“Younger professionals are opting to rent beds or rooms instead of full apartments. The flexibility and cost-sharing make co-living highly attractive,” said Chouhan.
(With inputs from bl intern Nethra Sailesh)
Published on April 18, 2025