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Nowadays dreams too come at a price

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OUT OF BOUNDS: Rentals have gone up by 50 per cent in some areas in the city. –
OUT OF BOUNDS: Rentals have gone up by 50 per cent in some areas in the city. –

V.S. Palaniappan and Amutha Kannan

‘Dream Home’ is something people used to think of in terms of own house.

But, now it has become one to reckon with, even for a rented one. Getting a good house in a nice neighbourhood in Coimbatore has become, not just a dream, but a distant dream.

And getting it for a rent that suits the monthly budget is another problem to contend with. While almost all tenants complain that rents have been increased by the landlords, some say the amount has shot up to almost 50 per cent.

The rent for a house / apartment with a carpet area of 700 to 1,200 sq ft in a good locality well within city limits is between Rs. 4,000 and Rs. 18,000.

Tenants living in apartments have the extra burden of maintenance charges that amounts to anywhere between Rs. 500 and Rs. 1,500 payable every month.

Areas where house rents rule high are Sai Baba Colony, Race Course, R.S. Puram, Ramanathapuram, Pappanaickenpalayam, Sungam, Tiruchi Road, Mettuppalayam Road, Peelamedu, etc.

Areas with still reasonable rents are, Singanallur, Ondipudur, Irugur, Chinniampalayam, Vadavalli, Kovaipudur, Podanur, Perur, Idayarpalayam, TVS Nagar, and Ganapathy, as these areas do not strictly come within city limits.

If one were to compromise on the standards of living and neighbourhood, there are houses available on rent for much cheaper rates in thickly populated areas. These houses are invariably like match boxes located close to each other in small bylanes and inhabited by low or middle income group families that end up sharing common amenities.

Does the upper middle class vote for the above option? Most of them responded with a resounding “No.” A resident of Balu Nagar, Peelamedu, who is a tenant in an 800 sq ft independent house, says that till June the house rent was Rs. 2,700.

From this month, the landlord demands Rs. 4,800. He attributes it to the increase in Property Tax and various other factors. But, there is no question of increase in facilities.

He has also said that from now on every 11 months there will be a 20 per cent hike in the rent. He cannot think of shifting because this is convenient in terms of location and also the situation is the same in other areas too. He also says that the landlords of a street or area have formed an unregistered association and come up with such decisions. Hence, one is bound to follow what the other does.

In addition, the advance amount which used to be six months’ rent now varies from 10 months to 15 months. The landlord also deducts a certain amount towards cleaning and painting charges for the house when the tenant vacates. One really does not know how much of the advance amount one will get back while vacating the house, says an aggrieved tenant.

A landlord has let out his 1,100 sq ft two-bedroom apartment in Puliakulam, for Rs. 10,000. The advance is Rs. 80,000. He has another option to offer his tenant. If the tenant is willing to pay an advance amount of Rs. 1 lakh, then the rent will be Rs. 8,000. Such innovative options are on the increase to enable the landlords make the most of it, be it in terms of rent or advance.

M. Jeyaraj, a tenant residing in a 1,100 sq ft apartment for a rent of Rs. 6,000 for the past 22 months was told to pay Rs. 6,500 from August. “Actually, my landlord wanted to increase it by Rs. 1,000. But, since he was impressed with the way we are maintaining the apartment without a scratch, he was kind enough to reduce it by Rs. 500.”

While tenants see this as a money-making exercise by the landlords when the economy is on the surge, property owners justify the rental rates citing the market condition. They point out that given the cost of land and rate of interest for housing loans, house rents can no longer be cheap.

Almost 90 per cent of properties are constructed on borrowed funds which attract interest at prohibitive rates. Rent collected per month is inadequate to even pay the Equated Monthly Instalments (EMI) for the loan. In addition, the water consumption charges and the Property Tax slabs have gone up by nearly 40 per cent. The capital expense of maintaining the structures is very high in terms of civil repairs and painting, says a person who owns an apartment.

According to the house owners, houses will start giving returns in terms of profit only after 10 to 15 years of owning the property.

The increase in rents can be attributed to any trend like entry of many corporate houses, proposed IT parks, etc.

Whatever be the trend, the inflation that has made the common man compromise on many other factors, is driving him to compromise even on his basic comfort level – his home.

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