High Rent in Mumbai Outstrips Salaries, Leading to Concerns over 'Brain Drain'
According to a recent report by CREDAI-MCHI, the cost of renting a 1 BHK flat in Mumbai is now around Rs.5.18 lakh per year. This is higher than the average annual salary of junior-level employees in the city, which is Rs.4.49 lakh. This gap between rent and income is raising concerns that professionals may be forced to move to more affordable cities, leading to a potential "brain drain."
Mumbai vs. Other Cities: A Stark Comparison
The report highlights that in cities like Bengaluru and Delhi-NCR, rental costs for a 1 BHK flat are almost half of Mumbai’s, with annual rents at Rs.2.32 lakh in Bengaluru and Rs.2.29 lakh in Delhi-NCR. Interestingly, the average salaries in Bengaluru and Delhi-NCR are also relatively higher compared to Mumbai, with employees earning Rs.5.27 lakh annually in Bengaluru and Rs.4.29 lakh in Delhi-NCR. This makes the rent-to-income ratio much more manageable in these cities.
Negative Disposable Income in Mumbai
One of the major concerns raised by the report is the issue of negative disposable income in Mumbai. Negative disposable income refers to a situation where, after covering basic expenses like rent, food, and bills, an individual has little to no money left or may even be in a deficit. This situation is more prevalent in Mumbai due to the high cost of living.
For mid-level employees in Mumbai, who earn around Rs.15.07 lakh annually, nearly half of their salary goes toward rent for a 2 BHK apartment, which costs approximately Rs.7.5 lakh per year. In comparison, mid-level employees in Bengaluru and Delhi-NCR spend significantly less on rent, at Rs.3.90 lakh and Rs.3.55 lakh annually, while earning Rs.16.45 lakh and Rs.14.07 lakh, respectively.
Senior-Level Employees Also Feeling the Pinch
Senior-level professionals in Mumbai, earning an average of Rs.33.95 lakh annually, are spending Rs.14.05 lakh on rent for a 3 BHK apartment. In contrast, their counterparts in Bengaluru and Delhi-NCR pay much lower rents for similar accommodations. Bengaluru’s senior professionals pay around Rs.6.25 lakh annually, while those in Delhi-NCR spend about Rs.5.78 lakh.
Due to these high living costs, many senior professionals are reportedly leaving Mumbai in search of more affordable cities that offer a better lifestyle and the possibility of greater savings.
Also read: NTA Announces Changes in JEE Main Exam Pattern
The CREDAI-MCHI report paints a challenging picture for professionals living in Mumbai, particularly when compared to other major cities like Bengaluru and Delhi-NCR. The high rental prices, combined with lower disposable incomes, may push more professionals to relocate to cities with more affordable living conditions. This shift could lead to a talent drain from Mumbai, impacting the city's workforce and economic growth.
.