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“My contract, signed last year, mentions a yearly rent escalation of 20%, however my landlady hasn’t brought it up yet,” said Anirban Choudhury, a resident of Kasturi Nagar in East Bengaluru.
In another example, an early career professional Akanksha Agarwal managed to successfully negotiate a monthly rent of ₹16,500 for a double-sharing single room accommodation in Indiranagar last month. Meanwhile her neighbour, who signed up for an identical arrangement in the same building last year, has been shelling out ₹18,000 in monthly rental fee.
To elaborate, the rapid rental growth witnessed in Bengaluru in the immediate post-pandemic years of 2022 and 2023 is gradually easing, indicating a possible return to more sustainable trends, experts and local brokers who spoke to HT.com said.
“Rents have increased a lot in the past 2-3 years, and now the increase is there, but not as much as what we’ve seen in the past couple of years. Now landlords are okay with a standard 10% contractual increase. But with new leases, they’re looking at a normal 7-8% kind of a jump,” said Saurabh Garg, co-founder and Chief Business Officer of proptech unicorn NoBroker.
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In 2023, high-demand localities in Bengaluru, such as Koramangala, Sarjapur Road, Whitefield and Bellandur, among others, reported sudden annual rent hikes of up to 35%, as landlords attempted to recover pandemic losses amid a surge in demand with employees returning to offices.
Impact of increase in housing supply
However, following such above-normal surge, and relative stability in inflow of professionals back into the city coupled with release of new residential units in 2024, rents have witnessed a less than 10% rise during the first three quarters of the ongoing calendar.
According to NoBroker, between January-September 2024, the upscale locality of Koramangala in South Bengaluru and fast-growing Hebbal in the North recorded the highest annual growth in home rentals at 8%. Indiranagar, Sarjapur and Whitefield in East Bengaluru came next with a 7% hike. These areas are preferred localities, owing to a significant presence of offices in and around them.
“While there has been a slight increase in the average rental values in Q3 2024 compared to 2023-end in most of the micro markets, the percentage change from 2023 to Q3 2024 is lower than the increases observed between 2021 and 2022, and 2022 and 2023,” said Prashant Thakur, Regional Director and Head – Research, ANAROCK Group.
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For instance, the average rent on Thanisandra Main Road in North Bengaluru grew 17% year-on-year in 2021-end, and 20% at the end of 2022, data shared by Anarock showed. Meanwhile this year, during the July-September quarter of 2024, the locality has registered an 11% increase on an annual basis to ₹32,000.
Similarly, in Hebbal, average annual rent increase stood at 12% to ₹33,500 during Q3 2024, compared to a year-on-year hike of 14% and 20% at the end of 2022 and 2023, respectively.
In other localities, average rental fees grew between 11-15% over a 12-month period to stand at ₹35,700 on Sarjapur Road, ₹33,750 on Old Madras Road, ₹34,500 in CV Raman Nagar and 40,000 in HSR Layout during the quarter ended September 2024. These areas recorded average annual rent escalations to the tune of 5-33% at the end of the preceding two calendar years.
Stability fuelled by supply, more than demand
“The rate of increase has started to stabilise, primarily due to increased supply. The completion of numerous new residential projects, especially in high-demand micro markets, has significantly expanded the availability of rental units. As the rental market becomes more competitive, tenants are increasingly empowered to negotiate better deals and potentially secure lower rental rates,” Thakur explained.
Also Read: Relocating from Noida to Bengaluru? Here are 5 things you should know before renting an apartment in the city
Garg agreed. “A lot of supply has also started coming into the market. Everything that got stalled during Covid-19 is being delivered now, so that is increasing the number of homes which can be rented. When people started coming back after the pandemic, the demand was coming in hordes, so landlords could see that more people were visiting their homes and they could demand higher rents,” he added.
ANAROCK Research data shows a notable increase in completed residential units in 2024. As of Q3 2024, approximately 45,000 units have been completed, surpassing 2022’s total (43,430) and representing 85% of the 2023 figure (52,565).
Going forward, Anarock anticipates annual increases in rentals to the tune of 4-8%, while property prices are expected to register a rise of 5-10%.
Pan-Bengaluru rental trends in a nutshell
According to data sourced from Housing.com, average rent per month during the first quarter increased 31.5% year-on-year to ₹25,000 in 2023 and merely 4% in 2024 to ₹26,000.
During the April-June period, average rents per month jumped 27.7% annually to ₹23,000 in 2023 and 26% to ₹29,000 in 2024. Meanwhile, in the three-month period ended September, average rents rose 30% year-on-year to ₹26,000 in 2023 and 13.3% to ₹30,000 in the ongoing calendar year.
