Since 2022, rental prices in Bengaluru have skyrocketed due to several factors. The influx of global capability centers (GCCs) from multinational corporations is creating new job opportunities, prompting companies to discourage remote work and encourage employees to return to the city. Additionally, a significant rise in students from across the nation is drawn by the city’s esteemed educational institutions.

According to property consultancy Anarock, Bengaluru has experienced the highest rental growth among major Indian cities. A recent report highlights that Sarjapur Road witnessed a staggering 67% increase in rentals from late 2021 to mid-2024, with average monthly rates for 2BHK apartments (around 1,000 sqft) climbing from ₹21,000 to ₹35,000. Annual rental hikes typically range between 5% and 10%, but recent increases have far surpassed these norms.

“Areas close to the IT corridor, such as East and Northeast Bengaluru, have seen the most dramatic rent spikes,” notes BS Nesara, chairman of Concorde. Central districts like Indiranagar and Koramangala are also witnessing surging rental prices.

This surge can be largely attributed to a robust job market and companies insisting on in-office work. For example, Amazon CEO Andy Jassy has reinforced this trend with a return-to-office mandate, emphasizing the benefits of physical presence.

Flats vs. PGs
A notable shift is occurring among millennials, particularly students and young professionals, who are increasingly opting for shared apartments instead of paying guest (PG) accommodations. Shared living spaces offer greater freedom and privacy, free from the restrictions typical of PGs, such as curfews and fixed meal schedules.

21-year-old Samreen Alam from Kolkata, currently pursuing her post-graduation in Bengaluru, explains, “While shared apartments may cost between ₹13,000 and ₹20,000 per person, splitting utilities and groceries makes them more affordable.” Overall, she estimates that the average monthly living cost for students is between ₹20,000 and ₹30,000.

While many apartment complexes face complaints from residents about the influx of young tenants, property owners benefit from significant rental income. For instance, a 3BHK can yield between ₹60,000 and ₹70,000 per month depending on the number of occupants.

Commuting Challenges
Chintan Kothari of Settler Real Estate Consultants highlights that the rapid growth in housing demand is not matched by supply, particularly for middle-income renters. As a result, many are forced to seek accommodation farther from their workplaces, leading to longer commutes and contributing to Bengaluru’s traffic congestion.

For example, former IBM employee Sumesh K S found himself living 12 km from his office, resulting in daily commutes that could last from 45 minutes to an hour, depending on traffic conditions.

Market Stabilization
Despite these challenges, Saurabh Garg, co-founder of NoBroker, suggests that new housing supply is gradually entering the market, indicating a potential stabilization in rental increases. “The rental market is beginning to level off,” he says, providing some hope for renters facing steep costs.

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