Bengaluru real estate: Rising rental prices and strong returns on investment have made 1BHKs in Bengaluru highly sought-after

By Bricksnwall | 2025-02-19

While 2BHK flats in Bengaluru earn about 3-4%, 1BHK apartments usually yield above 5%, making them a desirable investment choice.

To be nearer to his place of employment, Srinivas Gowda moved to Bengaluru's upscale HSR Layout around two months ago. "The rents are outrageous here. I saw a 400 square foot, one-bedroom apartment that was semi-furnished and priced about ₹35,000 a month. "I'm shocked to see this in Bengaluru, as I thought rents were high in Mumbai," Gowda remarked.

There is still a high demand for one-bedroom apartments in Bengaluru's downtown and IT districts, especially from young professionals and students moving for work. Due to high demand and limited supply, developers have reduced the size of these flats during the last two years, but investors and end users still find them appealing. 1BHKs have emerged as a top investment option due to steady rental demand and rental yields above 5%.

Ten years ago, there weren't many 1BHK apartments in Bengaluru, and the ones that were available were really roomy. Today's new releases are much smaller, yet they fetch higher rentals, according to Sunil Singh, Director of Realty Corp.

The average carpet area of recently constructed 1BHK flats in Bengaluru has dropped by almost 8%, from 380 square feet in 2023 to 350 square feet in 2024, according to statistics from SquareYards.

Redevelopment of current city center projects

According to Sopan Gupta, Principal Partner at Square Yards, the 1BHK apartments are popular with investors and end users because of their consistently high rental demand from working professionals and comparatively smaller ticket sizes.

While 2BHK flats in Bengaluru provide about 3-4% rental income, 1BHK apartments usually give above 5%, making them a desirable investment option.

Over the past year, there has been a 20% increase in demand for 1BHKs in both standalone and city center locations. Because of this, a lot of landlords are turning their existing buildings into several one-bedroom apartments, according to Kiran Kumar, vice president of Hanu Reddy Realty.

According to real estate specialists, the average monthly rental price for a two-bedroom flat is between ₹25,000 and ₹30,000. Developers can double their rental income, though, if they split them into two distinct 1BHKs and charge at least ₹20,000 each unit. Additionally, each 1BHK's total carpet area is cut in half.

In high-demand locations, developers optimize layouts to maximize land utilization.

According to Singh, newly constructed 1BHK flats in Bengaluru were normally between 650 and 700 square feet in size, with some even going as high as 1,000 square feet, about two years ago. Units between 550 and 650 square feet are now available, nevertheless, thanks to recent constructions by Grade A builders. In the meantime, 1BHK apartments with a floor area of 350–400 square feet are available on the standalone builder floors.

Developers attempting to optimize design to maximize land efficiency in locations with high demand for compact configurations could be one of the factors contributing to this shift. Whether this is a short-term correction or a long-term market change will be determined by the upcoming releases," Gupta continued. 

Experts in real estate point out that in cities like Bengaluru, this trend is accompanied by rising land costs. "Developers cannot price a 1BHK above ₹50-60 lakh due to rising costs, especially for units sized at 450-500 sq ft," explained Manjesh S. Rao, Chief Real Estate Officer of BrokerInBlue. In order to keep prices within the reach of purchasers, the majority of developers are lowering the size of their units.

Source: Hindustan Times