As Bhutan’s capital continues to expand, the burden of housing costs is squeezing city dwellers’ budgets to worrying levels. Recent data from the Bhutan Living Standard Survey (BLSS) 2022 reveal that many urban households in Thimphu are paying well beyond internationally recommended limits for rent—leaving little left for food, healthcare, transportation, and other necessities.
High Costs, Tight Budgets
BLSS figures show that the median monthly income in urban areas stands at Nu 28,000. According to the United Nations Human Settlements Programme (UN-Habitat), households should cap housing costs at 30 percent of their income—no more than Nu 8,400 per month for the typical urban earner. Yet even on Thimphu’s outskirts, one-bedroom apartments commonly rent for Nu 8,000–10,000, while two-bedroom units start at Nu 10,000 and can climb as high as Nu 15,000.
The result: a growing number of residents find themselves dedicating 40 to 60 percent—or more—of their income to housing alone. In a country where the average household income is just Nu 17,500 per month, these figures underscore a widening affordability gap.
Voices from the Frontline
“Rent in a town like Thimphu is quite high,” says Durga Acharja, who recently moved into a shared attic space. “Entry-level salaries are around Nu 8,000–10,000, but basic bachelor quarters start at over Nu 8,000. There’s barely anything left for other expenses, so many of us split rooms and share costs.”
For Kencho Wangdi, the annual rent hike is an annual hardship. “I don’t earn much, and rents seem to go up every year,” he laments. “Living here on a low income is really tough.”
University student Jigme Yeshi echoes the sentiment: “Just finding a place to stay is hard. When we do, the rent takes up about 40 percent of our salary. Some friends spend nearly half their income on rent alone.”
Regulatory Gaps and Future Plans
Bhutan’s Tenancy Act of 2015 establishes clear rights and responsibilities for landlords and tenants but stops short of capping rents or tying them to income levels. In the absence of price controls or targeted rental support, market forces dictate housing costs—often to the detriment of low- and middle-income households.
Meanwhile, the government’s consolidated 13th Five-Year Plan (2024–2029) sets an ambitious goal: to raise average annual household income to Nu 2.5 million by 2029 (and Nu 5 million by 2034) through economic reforms, infrastructure development, and enhanced market access. Yet officials concede that meaningful progress on income growth—and by extension, housing affordability—will require time.
A Growing Affordability Gap
As Thimphu’s population swells and demand for housing intensifies, affordability is fast becoming the city’s most pressing challenge. For many Bhutanese families and young professionals, the struggle is not only to save but to simply cover daily living expenses after rent is paid.
Without swift policy action—whether through rental subsidies, the introduction of income-linked rent guidelines, or accelerated housing development—the capital’s rent crisis shows no sign of easing. For now, sharing rooms and cutting back on essentials remain the harsh reality for Thimphu’s lower-income residents.
