Rising residential rates, and the real culprits

For me, its house-changing blues yet again.

For some reason, changing my place of stay has almost become a routine in my life in the past 7 or so years. This is the 12th time I’m changing my place of residence in the 7 years (I’m counting moving all my things from Y to Zee as one change). You could almost say I’m used to moving my things around, but I guess these are things you never quite get used to.

This time though, I’ve picked up a place at a hefty price in a seemingly ‘hep’ location in Chennai – Adyar, in Chennai (for those who know the area). Of course, when you got to stay in the area where things are currently ‘happening’ you go to pay the right price. And I am. A 2BHK comes at 15 grand a month and that in Chennai. That’s 180,000 a year, and I couldn’t help but wonder about the per capita income in India – it is 29,000 a year, which means there are a LOT of people (more than 50% of Indian population) is living with less than 29 grand the whole year. And of course, 15 grand a month is a nice salary even for Indian city standards. You could run a family, and not be a pauper!

When a colleague of mine told me he picked a place for 15 grand last year, I thought he had gone nuts. Who would pay that much and, most importantly, why would you agree for that price and slowly jack up the price for others too? It’s very unfair, but I guess you eventually fall into the very same muck that you hated looking at. These days, you just don’t find a place to stay if you don’t shell out this much.

Who’s the culprit, anyway? I guess it’s a combination of three factors – (1) A growing economy that pumps in more money with people, (2) Cockroaches - I mean, brokers, and (3) Shortage of housing supply.

If you are an economist, is there anyway to arrest these? You wouldn’t want to mess with (1), of course. As for (3), you could reduce interest rates so that the housing sector picks up, but it most certainly can’t match the march of the economic growth. That said, I have a big problem with (3). It’s unfair. I don’t want to shell out 15 grand for a broker that just directed me to a house. It’s a cartel, and a very unfair one. It's the definition of improper market. I’ll be ok with a max of 5 grand, but not this much, especially when I know that they have ALL the incentives to increase the rental rates since it would directly mean more money to their kitty. I can’t think of an immediate solution, but there is one – an internet enabled network for house owners and people seeking accommodation, a la Craigslist which seems to work in most global destinations. Of course, that isn’t happen going to happen any time soon in India what with our internet savvy population (sarcasm directly intended), and I better be looking at a house to buy.

P.S: Had a forceful blogging break coz of the shifting. And I haven’t fixed my internet connection yet.