Bengaluru's Residential Rentals Cool as Economic Uncertainty Slows Demand

The once-booming rental market in Bengaluru is experiencing a significant slowdown, with rents for premium apartments dropping by 25-30% in several neighborhoods, driven by an influx of newly completed apartments and a slowdown in the IT sector.

BengaluruReal EstateRental MarketEconomic UncertaintyIt SectorReal Estate NewsAug 13, 2025

Bengaluru's Residential Rentals Cool as Economic Uncertainty Slows Demand

Real Estate News:Bengaluru’s once surging residential rental market is showing signs of cooling, with rates for premium apartments falling sharply after two years of relentless increases. Rents for 3BHK units, which landlords were confidently demanding at ₹50,000– ₹75,000 just months ago, are now being negotiated down to ₹35,000– ₹55,000, a drop of nearly 25–30% in several neighborhoods, one of the X users posted on the social media platform.

“I am experiencing that the residential rents in Bengaluru are falling like crazy. Landlords earlier demanding 50K-75K monthly rents for 3BHK are now welcoming tenants for ₹35k–55k,” the post by Kiran Rajput said. Rajput pointed out that the areas that saw the rentals falling include Rajajinagar towards the western parts of the city, Basaveswara Nagar, and Malleshwaram in the north-west.

These areas are conventional ones. Hardly any new guys coming from outside, mainly for IT jobs, will stay in these areas. So in these areas, the demand for rented houses is very low. We should check places like Outer Ring Road, another user shared. Real estate experts say that the correction is being driven by a confluence of factors: an influx of newly completed apartments flooding the market, a slowdown in fresh hiring in the IT and startup sectors, and tenants becoming more price-sensitive amid rising living costs and uncertain economic sentiment.

The return-to-office mandates fueled the pandemic-era surge in rents in late 2022 and early 2023, when a sudden demand spike left tenants scrambling for limited supply, driving prices up to record highs. Now, with more housing stock available and hybrid work arrangements keeping some employees away from the city, landlords are finding it harder to command peak rates, they said.

Rental demand has slowed noticeably, with enquiries dropping by around 15% compared to earlier months, according to Kiran Kumar, Vice President of Hanu Reddy Realty. “Earlier, we would get steady interest for areas like Malleswaram, but that demand has almost completely dried up,” he said. Typically, Bengaluru’s rental market starts picking up momentum in January–February as tenants look to relocate before the start of the academic year. However, this year’s festive season may be delaying decisions, with many preferring to complete celebrations before moving to new locations, experts pointed out.

Prime residential pockets such as Indiranagar and HSR Layout have seen rents remain stable rather than surging, while areas with abundant inventory, like southern IT corridor of Electronic City, are witnessing aggressive negotiations. “For properties listed at ₹40,000, several tenants are closing deals at ₹30,000– ₹35,000,” Kumar noted. The slowdown marks a stark contrast to the last two years, when high-growth corridors such as Whitefield experienced sharp rental escalations of 25–30%. “That upward momentum has now flattened out. We’re not seeing the rapid jumps in rent that became the norm post-pandemic,” Kumar said.

Amid slowing demand in the city’s rental market, some residents say Bengaluru’s high cost of living has long been fuelled by the spending power of its large tech workforce, and could see a shift if the sector faces prolonged headwinds. This shift in rental availability comes at a time when job market concerns are beginning to weigh on housing demand near tech hubs. Recently, Tata Consultancy Services (TCS) announced plans to trim its workforce by 2% in the 2026 financial year, translating to over 12,000 job cuts.

Since early 2024, major global companies such as Intel, Microsoft, and Tesla have carried out substantial layoffs as part of wider cost-cutting and efficiency drives. At the same time, rapid adoption of automation and artificial intelligence is reshaping the IT job market, shifting demand toward specialized skills in emerging tech. Industry experts say that while this shift is creating new opportunities, it is also slowing job growth in traditional IT roles.

“Bengaluru’s economy runs heavily on engineers, especially those in IT, who earn well and are willing to pay a premium even for basic services,” an X user wrote. They pointed to everyday examples, from some of the country’s highest PVR ticket prices to auto drivers charging ₹200– ₹300 for a short 1–2 kilometre ride on rainy days, as a reflection of this willingness to spend. The post noted that since a large share of the city’s population works in tech or relies on those who do, the cost of goods and services has steadily risen over time. If the tech industry slows, say, because of unfavourable US policies toward India, Bengaluru’s economy would feel it hard, the user cautioned, adding that such a shift could push more residents to downsize or relocate to more affordable areas.

After an extraordinary surge in 2023, when rental prices in hotspots like Koramangala, Sarjapur Road, Whitefield, and Bellandur jumped by as much as 30–35%, Bengaluru’s residential rental market is showing signs of cooling. Now, brokers say that rentals have started stabilizing, especially close to the IT corridors. “In areas such as Whitefield, Koramangala, and HSR Layout, rents have eased by roughly 3–5%,” said Manjesh S Rao, Chief Real Estate Officer at BrokerInBlue. The adjustment is most visible in the mid-segment. Two-bedroom apartments in BTM Layout and Sarjapur, once commanding ₹35,000– ₹40,000 a month, are now closing at around ₹30,000. On the fringes of Whitefield, in pockets like Bagalur, similar homes are leasing for under ₹27,000– ₹30,000, underscoring a broader stabilisation in the city’s rental market.

Frequently Asked Questions

What factors are contributing to the cooling of Bengaluru's rental market?

The cooling is driven by an influx of newly completed apartments, a slowdown in fresh hiring in the IT and startup sectors, and tenants becoming more price-sensitive amid rising living costs and uncertain economic sentiment.

How much have rental prices for 3BHK apartments in Bengaluru dropped?

Rents for 3BHK units, which were earlier demanded at ₹50,000– ₹75,000, are now being negotiated down to ₹35,000– ₹55,000, a drop of nearly 25–30% in several neighborhoods.

Which areas in Bengaluru are seeing the most significant drop in rental prices?

Areas such as Rajajinagar, Basaveswara Nagar, and Malleshwaram in the north-west are seeing the most significant drops in rental prices.

How are job market concerns affecting the rental market in Bengaluru?

Job market concerns, including layoffs and a shift towards specialized skills in emerging tech, are weighing on housing demand near tech hubs, leading to a slowdown in rental demand.

What is the current trend in rental prices in prime residential areas like Indiranagar and HSR Layout?

Prime residential areas like Indiranagar and HSR Layout have seen rents remain stable rather than surging, while areas with abundant inventory, like the southern IT corridor of Electronic City, are witnessing aggressive negotiations.