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
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SUDHAKARA JAIN
Thirty-two-year-old Alisha, who works in the oil and gas sector and arrived in Bengaluru a decade ago, is reeling from rent shocks. While her salary has seen meagre annual hikes of 5-10 per cent, there has been a 50–60 per cent jump in her house rent over the years. The house rent has climbed from ₹42,000 to ₹56,000, and then to ₹75,000 in the last few years, forcing her to evaluate whether to stay on in the city. The only escape from the cost trap is to leave, she says.
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.
Poor Compensation
Neha (name changed), an analyst at a leading consulting firm, complains that most of her salary now goes towards rent. “While I got a 13 per cent increment, rent is up by almost 10 per cent. There’s hardly any room for savings,” she says.
She is still fortunate enough to get a pay hike. Across many sectors, professionals complain about stagnant salaries. 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, while construction and real estate are handing out just 5-7 per cent hikes. Logistics has managed 6-8 per cent salary growth, boosted by e-commerce. Within tech, there is a stark divide. AI/ML professionals are seeing 10–15 per cent hikes, but traditional IT roles are barely moving, says 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 1 bhk 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.
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