Dubbed as the Silicon Valley and Start-Up capital of India, Bengaluru is the third most populous city in the country. Thanks to its booming economy, fueled by the IT/ITeS, telecommunication, biotechnology and manufacturing sectors, Bengaluru continues to witnesses an influx of a skilled migrant workforce. Over the years, this has helped augment the performance of the real estate market in Bengaluru, both residential and commercial.
Interestingly, with a score of 66.70, Bengaluru ranks at the top in the “Ease of Living Index 2020” by the Ministry of Housing and Urban Affairs. In fact, despite the second wave of COVID-19, the city’s real estate market was optimistic and bounced back quickly. According to a report by JLL, sales of residential units in the city grew by 47% in Q2 of 2021 over Q1 of 2021. Similar trends were visible in the office market as well. Anarock’s latest report on the office market states that Bengaluru, Chennai and Hyderabad together controlled the office market with a contribution of 66% to the overall demand in FY20-21. Additionally, the average monthly rentals have gone up from INR 67 per sq. ft. in 2018 to INR 77 per sq. ft. in FY20-21.
So, what makes Bengaluru such an attractive real estate market?
Unlike in some of the other major residential real estate markets in India, Bengaluru’s real estate demand is driven by end-users. The thrust on infrastructure development with metro, flyovers, underpasses, tech parks and improved public transport services among others has helped augment the real estate activity in the city. In addition to this, a conducive policy environment for businesses has attracted several MNCs and Start-Ups to Bengaluru, creating ample employment opportunities. This, coupled with the city’s salubrious climate, cosmopolitan culture, strong education hub of 893 colleges, have brought many young professionals and students alike to Bengaluru and eventually making it their home. As a result, the demand for housing and commercial space has amplified significantly, growing Bengaluru’s real estate market beyond the traditional hotspots to new micro markets. Some of these markets include Whitefield, Devanahalli, Sarjapur road, Hebbal, Hennur, Thanisandara, Yelehanka, Kanakpura road and Hosur road.
In fact, Bengaluru’s real estate market standouts due to its diverse product offerings across price points and customers. From affordable, mid-income to luxury and ultra-luxury housing, from IT parks to SEZs, from co-working to co-living spaces – it has something for everyone.
With the average age of a first-time homebuyer in Bengaluru reducing gradually, the demand for affordable and mid-income housing is largely driven by young professionals in the age group of late twenties to thirties. Luxury and ultra-luxury housing, on the other hand, is a segment that witnesses a lot of interest from High-Net-Worth Individuals (HNIs) and ultra HNIs. Similarly, a large number of outstation students as well as professionals have just begun their career are increasingly moving towards co-living spaces. More importantly, it is one of the few markets with developers who enjoy good brand equity due to their quality of construction and competitive pricing. Together, these factors make Bengaluru one of the most lucrative and stable real estate markets.
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