Apartment rental growth in Bengaluru has dropped between 5 and 10 per cent, with rentals in areas close to prime locations remaining stagnant since the last quarter, according to real estate brokers.
“The rental inquiries in the city, especially for prime areas such as Indiranagar and Koramangala, have dropped by at least 20 per cent in the last three months. We anticipate a correction in rents by up to 15 per cent within the next 2-3 months because of a slowdown in the realty sector,” said Kiran Kumar, Vice-president, Hanu Reddy Realty.
The slowdown comes after a major hike of close to 30-40 per cent in most areas in the last two years. The skewed demand and supply ratio is the primary cause behind the rental stabilisation across the city, according to industry experts.
Potential tenants have far more options to choose from as more inventories are available in comparison to the year-ago period, the experts cited.
During mid-2023, the real-estate sector in Bengaluru had become a hot seat for auctions and tenants were bidding hard for their choicest apartments, Moneycontrol had reported.
The robust demand had led to a rental hike of between 20 and 40 per cent in prime IT (information technology) corridors. “The price correction started in the April-June quarter this year due to the addition of more inventories in the rental market,” said Sunil Singh, Vice President, Realty Corp.
A decline in sales volume
According to data from ANAROCK, the Bengaluru residential market exhibited a notable sales downturn in the third quarter (Q3), ending September 30.
Data shows that around 15,000 housing units were sold — a dip of 8 per cent between Q2 and Q3.
East Bengaluru, traditionally a dominant force in the city's residential market, continued to hold a significant share in Q3 and accounted for 48 per cent of total sales.
However, this region reported an 18 per cent quarterly decline in sales volume. North Bengaluru, which has a 26 per cent market share, also reported a contraction in sales activity. There was a 6 per cent dip, as compared to the previous quarter.
In contrast, South Bengaluru demonstrated resilience amid a 13 per cent quarterly increase in sales volume. West Bengaluru, despite its smaller market share of 4 per cent, recorded a substantial 33 per cent quarterly increase in sales.
New housing launches
In Q3, Bengaluru accounted for a significant 17 per cent of new housing launches across India's top seven cities.
While the overall pace of new residential supply in Bengaluru experienced a marginal decline of 1 per cent, as compared to the previous quarter, the city reported a 7 per cent increase in new launches year-over-year.
East Bengaluru remained the dominant zone, accounting for 35 per cent of all new launches. West Bengaluru, which had seen limited activity in Q2, reported a surge in new launches, reaching nearly 1,000 units.
The Q3 market in Bengaluru was characterised by a strong preference for high-end residential properties. This segment experienced a 10 per cent quarter-on-quarter growth and accounted for 54 per cent of the city's new launches.
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