New Supply in Bengaluru’s Housing Market Pushes Landlords to Reassess Rents

Bengaluru is witnessing shift in its rental housing market trend. Over the last two years, the city experienced a surge in rents due to heightened demand, driven by the return of office-goers and an overall spike in housing needs. However, a growing supply of rental properties has begun to reshape the market, compelling landlords to revise rents downward in some prime areas.

Rents in key localities like Koramangala, Whitefield, and HSR Layout have shown signs of correction, declining by 5% to 10%. This is a significant development after nearly two years of steep rental increases that saw rents rise by up to 40% in high-demand areas. The changing dynamics indicate a narrowing gap between supply and demand as new housing projects continue to saturate the market.

The Evolution of Bengaluru’s Rental Market

The rental market in Bengaluru underwent substantial changes post-pandemic. During 2021-2023, areas like Sarjapur Road, Bellandur, and Koramangala became hotspots for residential demand, as professionals returned to the city in large numbers. The resultant spike in housing needs led to a sharp increase in rents, often pricing out many tenants.

However, this trend began to stabilize by mid-2024 as an influx of newly constructed homes brought fresh supply into the market. These developments gave tenants greater choice and the ability to negotiate better deals. Locations previously known for skyrocketing rents are now seeing reduced rates, making housing more accessible.

Peripheral regions, too, have not remained untouched by this shift. Suburban areas such as Bagalur, situated along Bengaluru’s IT corridors, now offer competitive rental options. For example, 2BHK apartments in Sarjapur, which once rented for ₹40,000 per month, are now available for around ₹35,000. Similarly, Bannerghatta Road has seen reductions, with semi-furnished units now priced as low as ₹12,000 monthly.

New Housing Supply Impact

The increase in rental options is largely driven by the completion of several residential projects across Bengaluru. Between April and June 2024, the city recorded over 16,000 new housing launches, contributing to 21% of the total residential launches across India’s leading cities.

Whitefield emerged as a significant contributor, accounting for nearly half of this new supply, followed by other growth corridors like Hosur Road and Bellary Road. Developers have strategically focused on areas with growing infrastructure and strong connectivity, ensuring these localities remain attractive to both investors and tenants.

With Bengaluru continuing to register consistent growth in housing supply—marked by a 7% year-on-year increase—landlords are finding it increasingly difficult to maintain higher rents. Many property owners in sought-after localities have begun to adopt competitive pricing strategies to avoid prolonged vacancies, particularly in large apartment complexes where multiple units are up for rent simultaneously.

Current Trends 

The rental market in Bengaluru is expected to remain tenant-friendly in the foreseeable future. As per The Hindustan Times, experts anticipate a further 5% to 10% reduction in rents across high-supply areas such as Whitefield, north Bengaluru, and Sarjapur. The steady influx of new inventory, coupled with a maturing rental market, is expected to drive this correction well into 2025.

Tenants are becoming more discerning, taking advantage of the increased options to evaluate properties based on price, location, and amenities. This trend has led to a notable shift in bargaining power, as tenants now have the ability to negotiate rent reductions, which was uncommon just a year ago.

Landlords are responding to these changes by offering added incentives to attract tenants. Concessions like lower security deposits, flexible lease terms, and waived maintenance fees are becoming increasingly common. Others are focusing on upgrading their properties by improving interiors or providing additional amenities to make their units more appealing.

A Balanced Market Benefits Tenants and Reshapes Landlord Strategies

The ongoing rental correction has provided relief to tenants, particularly young professionals and families, who previously struggled with inflated rents. For tenants, this period presents an opportunity to move to better localities or larger homes without significantly increasing their budgets.

For landlords, however, the situation demands adaptability and a willingness to reassess pricing. Those unwilling to align their rents with market trends risk facing prolonged vacancies, especially in areas with abundant supply. Many landlords are now seeking guidance from brokers to determine optimal rent levels and minimize vacancies.

This market correction also highlights a broader shift toward a balanced rental ecosystem. As supply catches up with demand, Bengaluru’s rental market is maturing, providing stability for both tenants and landlords.

Growth of Peripheral Regions

While the city’s central zones are experiencing stabilization, Bengaluru’s suburban areas are rapidly gaining traction. Localities like Bagalur, along with areas in the eastern and northern IT corridors, have become popular for their affordability and modern amenities. These regions are particularly appealing to middle-income families and young professionals willing to trade shorter commutes for larger, more comfortable living spaces.

The rise of suburban areas also underscores the importance of infrastructure development. Projects like the metro extension to Whitefield and the proposed Peripheral Ring Road are expected to further increase the attractiveness of these regions. Developers are strategically capitalizing on this shift by launching projects in well-connected localities to cater to the evolving preferences of tenants.

The Road Ahead

As Bengaluru heads into 2025, its rental market is poised for further adjustments. With a steady flow of new housing projects and evolving tenant expectations, landlords will need to focus on competitive pricing and value additions to remain relevant.

For tenants, the changing dynamics offer an excellent opportunity to find better housing options at reasonable rates. The increasing competition among landlords ensures a more tenant-friendly market, making it easier for renters to secure favorable deals. The long-term outlook for Bengaluru’s rental market hinges on how supply and demand continue to evolve. While the current trends point toward stability and balance, factors such as infrastructure development and economic growth will play a pivotal role in shaping the market’s trajectory.