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In 2024, Bangalore's rental market, particularly in areas like Whitefield, Koramangala, and BTM Layout, showed signs of cooling after a surge earlier in the year. This slowdown in rental growth is attributed to a substantial increase in new apartment completions, totaling nearly 8,850 units launched in Q1 2024. Whitefield alone accounted for about 35% of these launches. The influx of new rental options has stabilised prices, providing renters with more choices. Experts suggest this trend may lead to a rental correction, potentially lowering rents in specific parts of the city, although the full impact remains to be seen as the market continues to adjust.
After a significant rise in rent prices in Bangalore earlier in 2024, the market appears to be cooling down. Local brokers are reporting a slowdown in rental growth, particularly in popular areas like Whitefield (known for its tech companies), Koramangala, and BTM Layout. While property prices remain high in these areas, rent increases have stalled since February. Experts attribute this to a recent surge in new apartment completions, with a total of nearly 8,850 units launched in Bangalore during the first quarter of 2024, according to Cushman and Wakefield. Whitefield alone accounted for almost 35% of these new launches. This influx of new rental options is helping to stabilise prices and provide renters with more choices. Advertisement
If the current trend of stagnant rent growth continues, some experts predict a rental correction in certain parts of the city. This could lead to lower rents, especially in eastern and central Bangalore. However, brokers like Kiran Kumar, Vice President of Hanu Reddy Realty, caution that it's still too early to say for sure. They recommend waiting at least another month to see the full impact on the sector. A rental correction could see a drop in rental prices, particularly in areas like Whitefield and Sarjapur, where rents for 2 BHK apartments have remained stagnant at INR 30,000-40,000 since February. In some cases, there have been minimal increases of INR 4,000-5,000 only for very premium properties. Notably, rentals had skyrocketed by almost 15-20 percent in these areas compared to the first few quarters of 2023.
Interestingly, Bangalore isn't the only major city experiencing a slowdown in rental growth. Mumbai, another major Indian real estate market, is also seeing a similar trend. There, premium gated societies, which previously experienced rapid rent increases of 50-60% between 2021-2023, are now seeing growth rates closer to inflation. This is likely due to a slowdown in redevelopment projects and an increase in the overall supply of premium apartments.
The Bangalore rental market is in a period of transition. While it's still early to predict the long-term impact, the recent increase in supply, with an expected delivery of 51,685 units in 2024 according to ANAROCK, a real estate consultant, appears to be bringing some relief to renters. This trend, coupled with national developments, could lead to a more balanced rental market in Bangalore in the coming months.
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