The rising rental market in Bengaluru is cooling, particularly in IT corridors. With nearly 8,850 units launched in Q1 2024 and a shift to hybrid work models, tech professionals are seeking affordable options on the outskirts. Rental prices in IT hubs like Whitefield and Sarjapur have dropped 15-20% year-on-year. Many are moving to the outskirts for more spacious, cost-effective homes. Improved metro connectivity and increased inventory have given renters more leverage. Landlords are reducing rents in prime areas to attract tenants, anticipating a significant market correction. This trend offers tech professionals the chance to secure better living spaces at lower prices.
The rising rental market in Bengaluru seems to be cooling down, especially in the IT corridors. With a rise in available apartments (nearly 8,850 units launched in Q1 2024) and a shift towards hybrid work models, tech professionals are increasingly looking for affordable options in the city's outskirts.
Rental prices in prime IT hubs like Whitefield and Sarjapur have seen a significant decrease of 15-20% year-on-year. Many IT couples are choosing to move to the outskirts, where they can find spacious 3-bedroom apartments (3BHKs) for the price of a smaller 2-bedroom apartment (2BHK) in the city centre. For instance, a couple in Sarjapur found a 3BHK for INR 38,000 on the outskirts, compared to INR 35,000-40,000 for a 2BHK in their current location.
The situation has changed dramatically from mid-2023, when fierce competition for scarce apartments led to bidding wars. A recent report by Cushman and Wakefield indicates a 14% year-on-year increase in available apartments in the first quarter of 2024, with Whitefield alone accounting for nearly 35% of this growth (almost 3,100 new units). This surge in inventory has given renters more leverage and bargaining power.
The rise of hybrid work models, where employees split their time between home and office, is another factor driving the shift. With less need for daily commutes, techies are now open to living further away from their workplaces, prioritising affordability and space over location. Additionally, improved metro connectivity is making some previously distant areas more accessible, like Old Madras Road and KR Puram which are becoming attractive alternatives to Indiranagar.
As demand cools down, landlords are being forced to adjust their rental expectations. In some prime locations like Koramangala, landlords have reduced rents by INR 10,000-15,000 to attract tenants. Similar adjustments are happening in the outskirts, with a recent example being a 2BHK in Budigere (outskirts of Whitefield) seeing a rent drop from INR 45,000 to INR 35,000.
Real estate brokers predict a major correction in Bengaluru's rental market over the next quarter, with potential reductions of up to INR 20,000. This shift presents an opportunity for tech professionals and other renters to secure spacious and comfortable living spaces at more affordable prices in the city's outskirts. While the total number of units delivered in 2024 is expected to be similar to 2023 (around 51,000), the increased availability in the first half of the year is leading to a renter-friendly market.
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