New trends in the rental market

The rental market currently is not doing well nowadays, as there are an increasing number of empty apartments and also empty commercial spaces even in prime areas. The apartment owners are now demanding for replacement tenant before shifting out in some areas like Dangrina, Taba, Changzamtog, and Langjophaka in Thimphu.

According to a tenant, Namgay, some owners even pressurize the tenants, withholding their security deposits against them.  She said, “It depends on the owners mostly, however, there are many cases of the owners withholding our security deposit if we don’t find an immediate replacement.”

In a similar situation in Taba, a tenant was asked to find an immediate replacement and even after finding one, she did not get back her security deposit.

According to the Tenancy Act of Bhutan 2015, the lessor shall refund the security deposit as specified in the lease agreement after deducting the cost of repairs other than normal wear and tear.

There are also tenants like Pema who said if the house owners are notified on time, a month earlier, then they can get back their security deposit. 

Owners share that they are not getting enough tenants in their buildings due less population in the country.

According to Thinley, a building owner in Motithang, there are lesser tenants due to affordability and inflation to take up the empty apartments. She pointed out that although she reduced the rent, there is always enquiry but apartments are rarely leased out.

Leasing apartments in Thimphu is very expensive and there are many cases of people spending more than 30 percent of their income on house rents.

High house rent is an always an issue, as the Tenancy Act allows the owner to increase the rent 10 percent every two years but there are also few cases of unlawful increases.

According to Rinchen, even old houses which are not in liveable conditions are also pricey, especially in the prime areas, which are near town.

Although there are less tenants, there is not much cases of rent reduction, with most owners choosing to leave the building empty, rather than renting it out at discounted amounts.

A building owner is Dangrina said that he would rather leave his whole building empty then rent it out on discounted amount as his building is a newly constructed one.

Many people believe that Thimphu is becoming a ghost town, with many young people leaving the country for better opportunities abroad. Commercial areas are also emptying out, as people are rarely leasing out commercial areas.

As business people are also leaving the country for better opportunities, it has also led to empty commercial areas.

With the pay revision, there is also much speculations on house owners increasing their rents. A notification also was circulated, warning of unlawful hikes.

Rinchen shared that as houses are emptying out, they will need tenants to be able to pay back their loans. “I don’t think there will be much hikes, however, there is no chance of lowering the rents. In Thimphu, no matter the amount of people living for Australia, Thimphu is known as the place for opportunities, so owners believe there will always be people, so the rent will never go lower.”

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