Bengaluru’s rental market stabilises as landlords reduce rents by 5%-10% amid a surge in new housing supply
The Bengaluru real estate market is witnessing a shift as landlords begin to reduce rents by 5%–10% in prime localities. After experiencing steep hikes of up to 40% over the past two years, the rental market shows signs of stabilisation. Industry experts attribute this trend to a narrowing supply-demand gap, driven by an influx of new housing options. Localities like Koramangala, Whitefield, and Sarjapur Road, which previously led rental spikes, are now seeing moderated rents. For example, a 2BHK in BTM Layout that once cost ₹40,000 per month is now available for ₹35,000, offering tenants a welcome respite.
The year 2023 marked a surge in new housing developments in Bengaluru, with 16,537 home launches recorded between April and June, accounting for 21% of total residential launches across top Indian cities. Whitefield led the charge, representing 47% of the fresh supply and 57% of total sales in the same period. Other submarkets, including Hosur Road and Bellary Road, also contributed significantly. Between July and September, Bengaluru accounted for 17% of new housing launches in India, underscoring the city’s growing prominence as a residential hub.
From a sustainability perspective, the increase in housing supply is likely to benefit the city’s urban planning efforts by alleviating congestion in high-demand areas. New developments in the eastern IT corridor, such as Bagalur, offer affordable rental options like ₹27,000 for a 2BHK, reducing pressure on city centres. Experts believe that such distributed growth supports a balanced urban ecosystem and reduces over-reliance on established neighbourhoods.
Looking ahead, analysts predict a rental correction of 5%–10% by 2025, particularly in areas with abundant inventory, such as Whitefield and North Bengaluru. While demand remains robust, increased supply provides tenants with greater choice, fostering competition among landlords. This shift could encourage sustainable growth while addressing affordability concerns, reflecting a broader transformation in Bengaluru’s housing market.
