Mumbai Rent Crisis: Soaring Costs Drive Talent to Affordable Cities

Mumbai, already renowned for its sky-high cost of living, is now seeing a surge in rental housing prices, with the average monthly rent for a 1 BHK apartment exceeding ₹43,150, as reported by CREDAI-MCHI. This equates to an annual rental cost of ₹5.18 lakh, a figure that overshadows the average annual salary of junior-level employees in the city, which stands at around ₹4.49 lakh.

This growing disparity between wages and housing costs may prompt professionals to leave Mumbai for more affordable cities, raising concerns about a potential brain drain. In stark contrast, rents in cities like Bengaluru and Delhi-NCR are nearly half of Mumbai’s rates. Bengaluru’s average rent for a 1 BHK is ₹2.32 lakh per year, while Delhi-NCR’s is ₹2.29 lakh. The respective salaries in these cities also create more financial breathing room for junior professionals. For instance, in Bengaluru, junior employees earn an average salary of ₹5.27 lakh, while in Delhi-NCR, it stands at ₹4.29 lakh—enabling them to maintain a higher disposable income.

For mid-level professionals in Mumbai, the financial strain continues. Typically renting 2 BHK apartments, they earn an average salary of ₹15.07 lakh annually, yet spend half of it—approximately ₹7.5 lakh—on rent. This leaves little for savings or other essential expenses. In comparison, Bengaluru’s mid-level professionals earn ₹16.45 lakh and spend only ₹3.90 lakh on rent, while those in Delhi-NCR earn ₹14.07 lakh and pay ₹3.55 lakh for housing. These figures highlight Mumbai’s ever-increasing financial burden, which contributes to deteriorating work-life balance and long commutes for its residents.

Senior professionals face similar challenges. In Mumbai, senior employees, who typically rent 3 BHK apartments, earn an average of ₹33.95 lakh but must allocate a significant portion—₹14.05 lakh—toward rent. In Bengaluru, senior professionals earning ₹35.35 lakh spend only ₹6.25 lakh on rent, while in Delhi-NCR, the figures are ₹30.73 lakh and ₹5.78 lakh, respectively. This disparity makes other cities more attractive for skilled professionals seeking a better quality of life.

Moreover, Mumbai’s exorbitant housing approval costs significantly contribute to the unaffordability crisis. Developers in the city face approval costs that are 25 times higher than those in Delhi-NCR, 50 times higher than Hyderabad, and nearly 47 times higher than Bengaluru. These costs hinder the development of affordable housing projects, exacerbating Mumbai’s housing shortage.

While Mumbai is investing heavily in infrastructure projects such as the metro rail, Trans Harbor Sea Link, and Coastal Road—collectively valued at nearly ₹25.56 lakh crore—experts fear that the high cost of living may lead residents to relocate to more affordable cities. This exodus could result in the underutilisation of these ambitious infrastructure projects. Niranjan Hiranandani, a prominent real estate developer, recently pointed out that homebuyers in Mumbai pay almost 50% of the property cost in taxes, including GST, stamp duty, and FSI rates. This tax burden further constrains the ability of developers to offer affordable housing, adding to the financial challenges faced by residents.