Bengaluru Apartment Rentals Cool Amid Economic Uncertainty Shift

The Cool Down of Bengaluru’s Apartment Rentals

After a relentless surge over the past two years, Bengaluru’s residential rental market is finally showing signs of cooling. Once commanding high rental rates, premium 3BHK apartments that landlords confidently offered at ₹50,000–₹75,000 are now negotiating much lower, around ₹35,000–₹55,000 in several neighborhoods. Areas such as Basaveswara Nagar, Rajajinagar, and Malleshwaram have especially seen this downward shift as demand dwindles.

Factors Behind the Rental Correction

This correction can be attributed to multiple forces converging simultaneously—the influx of newly completed apartment inventories flooding the market, a slowdown in fresh hiring within the IT sector and startups, and tenants becoming highly price-conscious amidst rising living costs and overall economic uncertainty.

The Era of Post-Pandemic Rental Surge and Its Fade

The pandemic-era rental spike, driven by return-to-office mandates, saw tenants scrambling for limited housing supply, pushing rents to record highs by late 2022 and early 2023. However, greater housing stock availability combined with hybrid work models has tempered this demand, compelling landlords to reduce peak asking prices.

Market Demand and Enquiries are Declining

Rental inquiries have dropped by nearly 15%, with areas like Malleswaram experiencing a near halt in tenant interest. Seasonal factors and delayed moving decisions during festivals have further affected the market’s momentum.

Rental Stabilization in Key Neighborhoods

• Neighborhoods such as Indiranagar and HSR Layout report stable rents rather than surges.
• Southern IT corridor areas like Electronic City witness intense rent negotiations, with prices often 15–25% lower than previous peaks.
• In mid-segment housing, 2BHK apartments in BTM Layout and Sarjapur lease for about ₹30,000, down from ₹35,000–₹40,000.
• On the outskirts of Whitefield, similar apartments list for ₹27,000–₹30,000, signaling wider market stabilization.

The Impact of Economic Uncertainty and IT Sector Changes

With slowdowns underway in the IT sector and layoffs from major companies like TCS, Microsoft, and Tesla, tenants are seeking affordable options. The high cost of living in Bengaluru, once buoyed by a tech-savvy workforce, now faces pressures that could lead many toward downsizing or relocation.

Looking Ahead: A Market in Transition

While rents have cooled after an extraordinary growth period, the mix of increasing housing supply, economic slowdown, and evolving work patterns point to a rental market in transition—offering both challenges and opportunities for tenants and landlords alike.