Mumbai may face “Brain Drain” as real estate prices soar; residents struggle to afford rent
Mumbai may face "Brain Drain" as real estate prices soar; residents struggle to afford rent.
Junior level employee earn Rs.4.49 lakh to pay Rs.5.18 lakh for rent
In recent reports, the rising cost of living in Mumbai has come under scrutiny, particularly for mid-level and senior-level employees. With escalating rent prices significantly impacting disposable income, many professionals are seeking more affordable living options in cities like Bengaluru and Delhi-NCR.
According to a report by CREDAI-MCHI, the annual cost of renting a 1 BHK flat in Mumbai is approximately ₹5.18 lakh. This amount exceeds the average yearly salary of junior-level employees, which stands at ₹4.49 lakh.
The report expresses concerns that the soaring rental prices in Mumbai might compel professionals to relocate to more affordable cities, resulting in a ‘brain drain’. It also points out that in cities such as Bengaluru and Delhi-NCR, the annual rent for a 1 BHK flat is almost half of what it costs in Mumbai, with prices at ₹2.32 lakh and ₹2.29 lakh respectively.
According to the report, the average annual salary for employees in Bengaluru and Delhi is ₹5.27 lakh and ₹4.29 lakh, respectively.
The report from the real estate developers’ association states that the negative disposable income in Mumbai creates challenges for residents in managing basic living costs. Negative disposable income refers to a situation where, after covering necessary expenses such as rent, food, and bills, individuals find themselves with no remaining funds or even in a deficit.
For mid-level employees in Mumbai, who have an annual income of approximately ₹15.07 lakh, the report indicates that they allocate nearly half of their salary to rent a 2 BHK apartment, which costs ₹7.5 lakh per year. In contrast, mid-level employees in Bengaluru and Delhi-NCR pay much less for rent. In Bengaluru, they spend ₹3.90 lakh annually while earning ₹16.45 lakh. In Delhi, their annual earnings are around ₹14.07 lakh, and they pay ₹3.55 lakh for rent, according to the report.
Senior-level employees in Mumbai, who earn about ₹33.95 lakh per year, spend ₹14.05 lakh on rent for a 3 BHK apartment. In comparison, senior professionals in Bengaluru and Delhi-NCR pay significantly less, with rents at ₹6.25 lakh and ₹5.78 lakh, respectively, for similar housing. As a result, many senior professionals are choosing to leave Mumbai for more affordable cities in pursuit of a better lifestyle and increased savings.
