Bangalore: When entrepreneur Zafar Ansari declined to renew his apartment lease so he could move into a cheaper place, his landlord offered him an immediate discount of 20% on the rent. That’s a sizeable saving on the Rs15,000 monthly he had been paying for the 2,600 sq. feet penthouse in East Bangalore’s CV Raman Nagar.

Ground reality: Hiranandani Gardens, a township in the Powai suburb of Mumbai. At Verona building in the township, the rent for a 1,700 sq. ft flat on company lease has been slashed from Rs2.25 lakh to Rs1.65 lakh. Santosh Harhare / Hindustan Times

So, if you think you are paying way too much for a two-bedroom flat that is 20km from the city centre, now is the time to negotiate a lower price or find a better home.

Home owners are renegotiating existing rentals even before the lease ends in a market where lease rates have fallen by 30-40% amid all the gloom in the real-estate market.

Over the last three months, post-Diwali, rentals have dipped in line with demand and property prices fell sharply across various markets as the Indian economy grows at a slower pace and the world battles recession.

“If capital values go down, rentals have to go down too," said Shveta Jain, national head, residential, at the property consultancy Cushman and Wakefield.

With the US and Europe battling recession after the global banking industry turmoil, a number of multi-national companies have sent back Bangalore-based expatriates, pumping up residential vacancies, said a property consultant in the tech city.

“With the banking crisis, a number of banks have also reduced their budgets for house rents and are looking at more affordable options," said the consultant, who didn’t want to be named.

It’s not just in Bangalore. At Verona building in Hiranandani Gardens, a township in the northern Mumbai suburb of Powai, the rental has been slashed from Rs2.25 lakh to Rs1.65 lakh for a 1,700 sq. ft flat given on company lease. The landlord discounted the rent even before the lease period ended.

In Mumbai’s suburban Bandra, where rentals had peaked during the 2004-05 boomtime, there has been been a sharp decline in rentals in the past two months. K.K. Shetty, a Bandra-based broker, said that despite offering discounts, home-owners are still not finding tenants.

Companies that used to rent huge apartments for three or five years at high rents “are not renewing leases as a result of which a number of premium properties are lying empty with us for the past few months," said Shetty.

For budget-home tenants, this is a good time, said Arvind Bhanushali, a broker in Navi Mumbai. “Even if you have a budget of Rs10,000, today you will get better, bigger flat within that. Landlords have been sitting with empty apartments, so they have no choice, but to negotiate," said Bhanushali.

A Cushman & Wakefield report on the residential sector in the fourth quarter, says that in Delhi and the National Capital Region centred on it, rentals have corrected the most in Gurgaon, by a maximum 18%. Rentals in south-central and south-east locations in Delhi have corrected because of varied suburban options providing a relatively better quality of living.

For Samrat Basu, who works with a multi-national bank in Kolkata and is moving to Bangalore with his wife, there couldn’t be a better time to rent a home.

“I was spoilt for choice, could bargain and got a far better flat in my budget compared to what I would have even six months back," said Basu, who has clinched a two-bedroom flat for Rs12,000 a month in Koramangala in South-East Bangalore.

Shabana Hussain contributed to this story.