Bengaluru’s massive IT layoffs trigger real estate slump

Bengaluru’s real estate sector is feeling the heat as massive job losses in the IT industry disrupt housing demand. Over 50,000 IT employees have been laid off in 2024, largely due to the growing adoption of artificial intelligence (AI) and automation. This wave of unemployment has directly impacted rental markets, particularly in tech-centric areas.

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The demand for Paying Guest (PG) accommodations and budget rental apartments—favored by entry-level IT workers—has sharply declined. Many property owners, who banked on a steady influx of tech professionals, are now struggling with vacant units and lower rental yields. As a result, rental prices are stagnating or even falling in some areas, forcing landlords to rethink their strategies.

The worst-hit regions include the Outer Ring Road (ORR) stretch, where a significant portion of Bengaluru’s IT workforce resides. Investors who had poured funds into real estate projects, expecting continued demand, now face uncertainty as properties remain unoccupied. The accelerated shift toward AI-driven roles has particularly affected software testers and junior programmers, further straining the housing sector.

Beyond real estate, the broader economy is also feeling the pinch, as reduced disposable income among IT professionals impacts local businesses. With Bengaluru’s real estate market closely tied to the tech industry, experts warn that unless the job market stabilizes, property investments will continue to suffer.