(Image source from: Moneycontrol.com)
In the last couple of years, Bengaluru's tech professionals have been on a rental frenzy, but now they're migrating from the IT hubs to the city's outskirts, where housing costs are more manageable. Brokers report a 15-20% year-on-year decline in rental prices in-centric suburbs like Whitefield. Recently, a tech-savvy couple living in Sarjapura's prime area decided to move to the outskirts, about 5 kilometers away, finding a 3BHK for around ₹38,000, compared to 2BHKs in Sarjapur starting at ₹35,000-₹40,000. The eastern IT corridor, including Whitefield, Hoodi, Outer Ring Road, and Sarjapur Road, has given way to more affordable options in Varthur, Kunahalli, and Channasandra. Experts note that with increased housing inventory, prospective tenants now have more choices than they did a year ago. During mid-2023, Bengaluru's real estate market was a hotbed of auctions, with tenants fiercely bidding to secure the apartments they wanted, leading to a 20-40% rental hike in prime IT corridors.
Rental prices in Bengaluru's outskirts are experiencing a noticeable decline more housing units become available. A recent report by Cushman and Wakefield highlights that around 8,850 new units were launched the city during the first quarter of 2024, marking a 14% year-over-year increase, with Whitefield accounting for approximately 35% of this expansion. Additionally, another real estate consultant, ANAROCK, projects that Bengaluru will witness the delivery of roughly 51,685 units in 2024, a slight decrease from the 52,565units expected in 2023.
The rental market in areas like Kadugodi, Hoodi, and Channasandra has seen a significant drop, with 2BHK units now renting Rs. 30,-35,000, down from Rs.40,000 a year ago. This shift in rental prices is accompanied by a change in the perspective of renters, who are now more willing to move away from prime locations due to the growing acceptance of hybrid work models and availability of more affordable options. Individuals who aspired to live in Indiranagar are now in alternative areas like Old Madras Road and KR Puram, attracted by the improved connectivity provided by the metro system.
A significant shift has occurred in Bengaluru's rental landscape over the past year. Previously, tenants eagerly competed for the limited available apartments, but the dynamic has now changed. As the imbalance between rental demand and supply has started to level out, numerous landlords have taken the initiative to reduce rental prices by a substantial margin, even prime areas like Koramangala. For instance, a 3-bedroom apartment in Koramangala that was initially listed for Rs 75,000 per month remained vacant for over a month, prompting the landlord to lower the rent to Rs 65,000, which successfully secured a tenant. Similarly, in the Budigere suburb of Whitefield, a 2-bedroom apartment's monthly rent was recently decreased from Rs 45,000 to Rs 35,000. Furthermore, a real estate broker revealed that a 2-bedroom rental deal was closed on Mysore Road for Rs 30,000 per month, down from the initial asking price of Rs 40,000. This trend suggests that Bengaluru's rental market is poised for a substantial correction in the coming quarter, with the potential for a decrease of up to Rs 20,000 across various property types.
