Bengaluru, known for its vibrant IT sector with a plethora of established tech companies and emerging startups, has experienced significant economic and real estate development. The city has undergone remarkable changes, drawing considerable attention to its thriving residential property market. Presently, Bengaluru stands out not just as a top choice for IT professionals but also as an appealing option for those looking to invest in real estate.
A Brief Recap of the Previous Year
In 2023, Bengaluru’s real estate market witnessed notable activity, with a total of 497,965 new residential units launched, marking a 14 percent increase from the previous year. Interestingly, the bulk of this new supply was concentrated in specific micro-markets such as Bagalur, Panathur, Krishnarajapura, Anekal, and Yelahanka, suggesting targeted development efforts in these areas. The pricing dynamics of these units reveal the domination of homes in the INR 1-3 crore price bracket, constituting 42 percent of the overall new supply.
On the sales front, Bengaluru experienced significant traction, with around 44,002 units sold during the year, representing a substantial 44 percent year-on-year growth. This uptick in sales underscores the resilience and attractiveness of Bengaluru’s real estate market.
Neighbourhoods such Varthur, Sarjapur, Whitefield, Bagalur, and Krishnarajapura emerged as homebuying hotspots, indicating strong demand in these localities.
Interestingly, 2BHK apartments were the most popular choice among buyers, comprising 42 percent of the total units sold in 2023, closely followed by 3BHK units with a 41 percent share. The pricing segment of INR 45 lakh – INR 75 lakh garnered the highest sales volume, capturing 33 percent of total sales. This indicates that a significant portion of buyers preferred mid-segment budget homes, driving demand for affordable yet quality housing options.
Contrasting Demand Trends in the First Quarter of 2024
With around 10,380 units transacted in Q1 2024, Bengaluru’s residential sales exhibited contrasting trends when compared to both the same period in 2023 and the preceding quarter, Q4 2023.
Comparing the sales figure of Q1 2024 to Q1 2023, there was a notable 40% year-on-year growth, suggesting a positive trajectory and sustained demand in Bengaluru’s residential real estate market. However, when comparing Q1 2024 to the previous quarter Q4 2023, there was a decline of 40% in sales, reflecting a significant drop in sales volume within a single quarter.
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This decline may be influenced by seasonal factors, economic conditions, or specific market dynamics affecting buyer behaviour during that period.
New Supply Sees a Decline
In Q1 2024, Bengaluru's new supply of residential units showed a decline, both quarter-on-quarter and year-on-year.
While the city saw the launch of around 10,000 units in Q1 2024, there was a decrease of 23% in new supply compared to the year ago period of Q1 2023. Furthermore, when compared to the previous quarter Q4 2023, there was a significant decline of 21% in new supply indicating a notable tightening in the number of residential units introduced to the market.
Summing Up
Bengaluru's real estate market saw robust activity in 2023, marked by a surge in new residential unit launches. Mid to high-end properties dominated the market, with significant sales recorded across various neighbourhoods, highlighting buyer preferences for 2BHK units. However, the first quarter of 2024 presented contrasting demand trends. While there was notable year-on-year growth in residential sales, there was a significant decline compared to the previous quarter, indicating market volatility. New supply also experienced a decline during this period, reflecting a tightening in the residential market, characterized by both quarter-on-quarter and year-on-year declines.
Looking ahead, while Bengaluru's real estate market continues to show resilience, stakeholders must navigate carefully amidst fluctuating demand and supply dynamics. Continued monitoring of market dynamics and adapting to evolving market conditions while maintaining a keen awareness of buyer preferences at the same time, will be crucial for sustainable growth in the future.
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