Why are Bengaluru landlords compromising on rental incomes?

Bengaluru’s residential rental market is witnessing a shift, with landlords reducing rents by 5% to 10% in central areas due to increased rental inventory. This comes after rents surged nearly 30%–40% in the past two years, driven by a sharp rise in demand post-pandemic.

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Industry experts attribute the stabilisation to a narrowing gap between supply and demand. With more properties now available, landlords are adjusting their expectations. High-demand areas like Koramangala, Sarjapur Road, Whitefield, and Bellandur had seen dramatic rent hikes of up to 35% in 2023 as landlords sought to recover pandemic losses amid a return-to-office trend.

However, local brokers note a downward trend. For instance, rents for 2BHK apartments in areas like BTM Layout and Sarjapur have dropped from ₹40,000 to around ₹35,000 per month. Similarly, outskirts like Bagalur in Whitefield now offer 2BHK units for under ₹27,000 monthly.

Data from ANAROCK and JLL reveal that while rental values increased slightly in Q3 2024, the pace has slowed compared to previous years. Concurrently, Bengaluru accounted for a significant 17% of India’s new housing launches in the July-September period, with Whitefield dominating fresh supply and sales.

The surge in new inventory and stabilising demand has pushed landlords to compromise on rents, marking a more balanced housing market.