Bengaluru’s housing market has shown resilience and growth in the first half of 2024, with a notable recovery in sales and new supply. According to a report by property consultancy Knight Frank India, the city’s housing sales registered a net positive growth of 4% during the April-June quarter, compared to the same period last year. This growth was primarily driven by the luxury housing segment. Let’s have deep look on Perfomance of Bengaluru Hosuing sales market growth
Key Highlights
- Sales Performance:
- Overall Sales: Bengaluru recorded 27,404 residential units sold in H1 2024, reflecting a 4% year-on-year increase from H1 2023.
- Luxury Segment: Homes priced at ₹1 crore and above saw a 76% annual growth, accounting for 50% of total sales with 13,698 units sold.
- Affordable Housing: Sales of homes priced below ₹50 lakh plummeted by 63%, comprising only 7% of total sales with 1,928 units.
- Mid-Segment: Homes priced between ₹50 lakh and ₹1 crore experienced a decline, dropping from 50% to 43% of total sales, with 11,778 units sold.
- Supply Dynamics:
- New Supply: The fresh supply of residential units increased by 9% to 25,567 units in H1 2024, compared to 23,542 units in H1 2023.
- Inventory Levels: The city’s available residential inventory stood at approximately 45,420 units, marking a 30% decline over five years from approximately 64,680 units in H1 2019.
- Price Trends:
- Average Prices: Bengaluru saw the highest annual increase in average residential prices among major Indian cities, rising by 32% to ₹7,800 per sq ft by H1 2024 from ₹5,900 per sq ft in H1 2023.
- Five-Year Growth: Over the past five years, average residential prices surged by 57%, reaching ₹7,800 per sq ft in H1 2024 from ₹4,960 per sq ft in H1 2019.
- North Bengaluru: This area commands the highest average capital values, exceeding ₹7,000 per sq ft.
Market Segmentation: Sales and Supply
| Segment | H1 2023 Sales | H1 2024 Sales | % Change | Share of Total Sales (H1 2024) |
|---|---|---|---|---|
| Luxury (₹1 crore & above) | 7,783 units | 13,698 units | +76% | 50% |
| Mid-Segment (₹50 lakh – ₹1 crore) | 11,961 units | 11,778 units | -1.5% | 43% |
| Affordable (Below ₹50 lakh) | 5,358 units | 1,928 units | -63% | 7% |
| Total | 25,102 units | 27,404 units | +4% | 100% |
Future Outlook
The positive trends in Bengaluru’s real estate market are expected to continue, with several factors contributing to sustained growth:
- Price Appreciation: Average capital values are projected to see a moderate appreciation of 10% across the city by the end of 2024. Prime locations and established tech corridors are likely to experience steeper growth.
- Emerging Segments: The rise of co-living spaces and eco-friendly homes is expected to play a significant role in market expansion.
- Reduced Inventory Overhang: Inventory overhang in the city fell to a record low of 8 months by H1 2024, from 15 months in H2 2019, indicating a balanced market with healthy absorption rates.
Also read: Manyata Tech Park Bangalore: Infrastructure, Facilities and More
Market Segmentation and Demand Drivers
The upward trend in the luxury housing sales in Bengaluru segment, with a 76% growth in sales, highlights a significant shift towards high-end properties. Several factors contribute to this trend:
- Economic Recovery: Post-pandemic economic recovery has boosted the purchasing power of higher-income groups, allowing them to invest in premium housing.
- Lifestyle Changes: The pandemic has led to a re-evaluation of living spaces, with many buyers seeking larger, more luxurious homes that offer better amenities and quality of life.
- Increased Investment: Bengaluru continues to attract investments from both domestic and international buyers, further driving demand in the luxury segment.
Mid-Segment Housing
While the mid-segment Bengaluru housing market saw a slight decline, it remains a significant part of Bengaluru’s real estate landscape.
- Affordability Concerns: Rising property prices have made it challenging for some buyers in the mid-segment to afford homes, leading to a slight dip in sales.
- Market Saturation: There is a relative saturation in the mid-segment, with many buyers having already made their purchases in previous years.
Affordable Housing
The steep decline in the affordable housing segment is noteworthy. Factors contributing to this trend include:
- Limited Supply: There has been a reduction in the supply of new affordable housing projects, partly due to rising construction costs and land prices.
- Shift in Preferences: There is a noticeable shift in buyer preferences towards mid-range and luxury properties, leaving the affordable segment less attractive.
- Economic Constraints: Lower-income groups continue to face financial challenges, making it difficult to invest in property despite the demand.
New Developments and Infrastructure
Bengaluru’s real estate market is also being shaped by several upcoming infrastructure projects and urban development initiatives.
- Metro Expansion: The ongoing expansion of Bengaluru’s metro network is enhancing connectivity across the city, making peripheral areas more attractive to homebuyers.
- Smart City Initiatives: Efforts to develop Bengaluru as a smart city are improving urban infrastructure, including better roads, utilities, and public services.
- Tech Corridor Development: The growth of tech corridors in North and East Bengaluru is attracting significant real estate investments, with new residential and commercial projects being launched.
Also read: Bangalore Metro Route: Gree, pink, yellow, Blue, Purple and Orange line, timings, stations 2024
Future Projections
Looking ahead, several trends are likely to influence Bengaluru’s real estate market:
- Sustained Demand for Luxury Housing: The luxury segment is expected to continue its growth trajectory, driven by increasing affluence and demand for premium living spaces.
- Emergence of Co-Living Spaces: There is a growing trend towards co-living spaces, particularly among the younger population and IT professionals, offering an alternative to traditional housing.
- Eco-Friendly Developments: Sustainable and eco-friendly housing projects are gaining popularity, aligning with global trends towards green living and environmental consciousness.
Conclusion
Bengaluru’s real estate market has shown robust performance in the first half of 2024, driven by strong demand in the luxury segment and a steady increase in new supply. The city’s strategic growth, coupled with rising prices and reduced inventory, paints a promising picture for future development. Stakeholders and potential investors can look forward to continued growth and new opportunities in this dynamic market.
Frequently Asked Questions:
Housing sales in Bengaluru grew by 4% year-on-year in the first half of 2024, reaching 27,404 units compared to 26,342 units in H1 2023.
The luxury housing segment, comprising homes priced at ₹1 crore and above, saw the highest growth with a 76% increase in sales, totaling 13,698 units.
The mid-segment (₹50 lakh – ₹1 crore) experienced a slight decline in its share, with sales falling from 50% to 43%, totaling 11,778 units.
The average residential price in Bengaluru increased by 32%, reaching ₹7,800 per sq ft by H1 2024, up from ₹5,900 per sq ft in H1 2023.
As of H1 2024, Bengaluru’s available residential inventory stood at approximately 45,420 units, marking a 30% five-year decline from approximately 64,680 units by H1 2019-end.
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