How did we create a society where we can’t afford to live in our own city?

I ended up renting an apartment 6 months ago in the outskirts of Pune where there is a below average road, dusty surroundings, no shops, no drinking water supply, no street lights and a cramped up badly architected housing society charging INR 16k p.m for a 700sqft apartment. There is a sub-standard local internet service provider and a decent cell-phone coverage only at a corner of the apartment. An apartment here sells at around 70 Lakh and 200 families fell for it so far.

Well, turns out, most were already renting a place in the city and were talked into buying one because of high rentals in every part of the city today.

Pune strategically houses an IT park in every 10km or less from Hinjewadi to Fursungi which raised rents multifold over the past 5 years.

IT Park Locations Working Residences
Hinjewadi IT Park Wakad, Aundh, Baner, Pashan, Nigdi, Chinchwad, Pimple Saudagar, Pimple Nilakh
Aundh IT Park Areas: Aundh, Baner, Pashan, Khadki, Bopodi
Senapati Bapat Road & Erandwane Kotrud, Singhad Road, Katraj, Karve Navar, Warje
Yerwada - Business Bay, Panchsheel Vishrantwadi, Viman Nagar, Tingre Nagar, Dhanori, Alandi
Vishrantwadi - Commerzone Viman Nagar, Tingre Nagar, Vishrantwadi, Dhanori, Khadki, Bopodi
Kalyani Nagar - Cerebrum & Viman Nagar Wadgaon Sheri, Koregaon Park, Viman nagar, Ghorpadi, Mundhwa
Kharadi - EON, WTC Kharadi, Wagholi, Wadgaon Sheri, Mundhwa, Magarpatta
Magarpatta Hadapsar, Mundhwa, Wadgaon Sheri, Kharadi, Wagholi
Fursungi - SP Hadapsar, Fatima Nagar, NIBM, Amanora, Magarpatta

The middlemen a.k.a Brokers

I planned to move from this under-privileged area and started looking up homes in other parts of the city. My wife refused to travel more than 10km to Kharadi making it more difficult. A nice initiative nobroker.in is failing traction from home owners who do not have time to manage their investments and hand it over to local brokers. The broker business guarantees -

  1. Sure occupancy of apartment every month
  2. Best rent (higher than average - in turn, raising the average)
  3. Miscellaneous legal care

which is great for the owner and the broker but exploits the renter. A decade old broker from the infamous Viman Nagar has started charging a non-negotiable 1.5 months rent as brokerage making a fortune for himself and exploiting the needy. With a knee breaking daily commute, employees tend to move close to work - raising rental demands. The rentals today have reached INR 20k p.m for a livable 2BHK in a decent society in these areas. The purchasing power of people migrating from cities such as Gurugram, Bangalore and Mumbai have additionally fuelled the rise in rentals.

How is Real Estate sales increasing?

Folks able to afford the rent (and brokerage), by making ends meet, eventually think why not to pay a little more p.m. and buy a house for ourselves? One who answers that question gets stuck at a well paying job for next 20 years and pays the mortgage. That housing project is usually in the outskirts of the city with a fortune tearing price, bad construction quality and a zero guaranteed possession.

Ultimately

Those who get lucky and buy the house - its back to square one. You live your crucial youth of life driving to work for an hour from a shitty area, devoid of every basic human amenity. But the hope that the investment will pay you back one day, and living in an own house keeps you going. And when that day comes - you’ll have a broker help you rent the place, for you to fly abroad OR return to your hometown OR buy a new place.

The vicious circle continues :)