Real Estate
Bengaluru's Rental Housing Market Sees 5-10% Price Correction in Q2 2024
By GeoSquare News Desk · Published 2024-07-17
Good news for tenants in Bengaluru! The city's rental housing market has recorded an average price correction of 5-10% during the April-June quarter of 2024, according to local brokers. This correction is primarily due to tenants shifting to the outskirts of the city, where new housing stock is available at lower rents than prime areas, and the emergence of multiple co-living options.
Typically, the second quarter of a calendar year registers higher rental activity, but this year, the trend has been reversed. The correction comes on account of multiple factors, including the shift to the outskirts, where rents are lower compared to prime areas surrounding IT corridors.
The trend was most prominent in localities surrounding the IT corridors, such as Sarjapur Road and Whitefield in East Bengaluru, which recorded a dip of over 10% in rental rates. A 1 BHK unit available for ₹28,000 per month in the first quarter of the year is now being rented out at ₹25,000.
However, this changing trend has not reflected in the central business district areas to the same degree, and rents in Grade A projects developed by well-known brands have fallen by a smaller margin.
The correction also comes in response to the rising inventory levels in Bengaluru, as developers counter the demand rally seen for real estate in the city. According to a Knight Frank India report, a total of 12,432 residential units were launched in Bengaluru during the June quarter of 2024, marking an 8% annual increase.
Many homebuyers who had booked their properties during the Covid-19 pandemic are receiving possession now, and the emergence of multiple co-living offerings in the city has also eaten into the rental housing market's share.
Bengaluru's rental market is returning to normalcy this year, and stakeholders anticipate a further drop in rents this quarter, of up to 10%, particularly on the outskirts of the city.
Landlords in Bengaluru are finally taking note of the changing tide and are beginning to lower their rents to attract tenants. While some stakeholders maintain that prices have remained stable, local brokers attest to an increase in queries for properties on the outskirts and a dip in rentals overall.