Rent is Going Up Again – Here is Why

Rent is Going Up Again – Here is Why

When faced with a global pandemic, the world changed. It is still changing, because the pandemic is still with us, forcing us to adapt and do things our own way. In order to adapt, we have done things like enforced curfews, states of emergency and basically gave people a choice of being vaccinated or going through endless hoops to simply go to a cafe. 

Some people have adapted differently, by moving out of the cities and going to the countryside. With an internet connection, working online is easy and possible from almost anywhere. A village is a much safer place, statistically, from the pandemic. However, with the pandemic becoming a bit less of a threat, people have started to move back to the cities only to be met with higher rent prices. How come? 

Here is why rent has increased recently.

The Ups and Downs of the Pandemic

The pandemic gave people a lot of time and most governments gave people more money, or rather, increased salaries to have them sit at home and stay safe. People did not purchase anything like cars, nor did they go on vacations. That being said, there is a lot of money in people’s pockets, meaning that the prices are bound to go up, with some things.

Rent is one of those things. People who have spent their entire year or year and a half, even two years, saving money, are bound to be able to spend more and pay more expensive rent. With more money in their pockets, consumers are willing to spend more money on rent, if they care about a certain part of a city, for example, closer to the city center.

Welcome Back, Now Pay More

Given how a lot of people left cities and populated areas to move somewhere quieter and where there are fewer people, their welcome back gift was an increase in rent prices. More people want to live in cities, especially since the pandemic is losing its grip (somewhat). With an influx of people, the only logical choice is to increase the rent prices, because they will have to stay somewhere if they want to live in a city. These price increases are pretty much due to demand. Demand and supply dictate market prices. So, where is the supply part?

Supply is Lacking – Not Enough Housing

Given the state of the pandemic and the different laws which enabled or hindered work, construction work has suffered everywhere. Materials are more expensive, up to 100% more expensive. With the increased prices of materials and the overall slow constructions, there is not enough housing to accommodate all the people. That leads to an increase in rent prices, because the already existing houses are by default more valuable.

Rent, like anything else, has its prices dictated by supply and demand. There is also the matter of the people having saved money by not purchasing expensive stuff during the pandemic. All of these things made rent prices go up. They will likely stabilize in 2023.