Bengaluru’s Residential Prices on the Rise - Is Now the Time to Invest?

Bengaluru, often hailed as the Silicon Valley of India, has been in the limelight in recent years with its resilient residential real estate market. Home to tech giants, startups, and a booming IT sector, Bengaluru has witnessed remarkable growth, both in terms of its economy and the real estate sector. This bustling metropolis in the southern part of the country is not only a preferred destination for IT professionals but also an attractive prospect for real estate investors.

A Steady Upward Trajectory

Bengaluru’s residential real estate market has embraced a cautious and measured approach to growth. Unlike the meteoric rises and falls witnessed in other metropolitan cities, Bengaluru has managed to keep property price appreciation relatively stable, without drastic downswings, even during the pandemic. While markets like Mumbai and NCR have experienced more dramatic price fluctuations, often influenced by factors such as speculative investments and excessive supply, the approach observed in Bengaluru has led to a more sustainable market, where property values align more closely with the fundamentals of supply and demand. Presently, the weighted average prices in Bengaluru hover around INR 6,300 – INR 6,500/sqft, which are at a much lower range than the prices quoted in Mumbai and NCR.

Led by the buoyancy in market sentiment, the city saw its weighted average prices rice by a significant 9% in Q2 2023 when compared to the prices a year ago in Q2 2022.

Why should you invest now?

One of the primary reasons for Bengaluru's price stability is its reliance on the technology sector. The city's status as India's IT capital has created a consistent influx of tech professionals. The steady demand for housing from this sector, coupled with a reliable stream of tenants, has helped maintain property values at a sustainable level. With the growth of residential projects to cater to the increased housing demand, there would be a corresponding rise in residential property prices fuelled by the aspirations of prospective buyers. Given that prices have already appreciated by 9% this year, it would be prudent to invest in the city’s residential property now when the rates are still fairly reasonable.

Why Bengaluru?

A major point in favour of investing in Bengaluru residential market is the scope for limited speculation in the industry.

Bengaluru's real estate market has not been prone to rampant speculation, which often characterizes volatile markets. In major cities such as Mumbai and NCR, speculative buying and selling have led to substantial price fluctuations in the past. Bengaluru, on the other hand, has seen a more genuine demand for properties spurred by the housing need of end-users, thus reducing the risk of sudden market crashes.

A Staggered Supply

Bengaluru has been witnessing a staggered supply in the city, rather than a sudden rush. This helps maintain a balance between supply and demand, reducing the risk of oversupply that can drive down property prices, thus boding well for prospective investors.

Resilience to Economic Shocks

The city's diverse economy, including IT, biotechnology, and manufacturing, has demonstrated resilience to economic shocks.

This resilience has shielded the real estate market from severe downturns, ensuring that property prices remain relatively stable.

Conclusion

Bengaluru's real estate market is well-positioned for sustainable growth in the future. With ongoing infrastructure projects, the city is expanding and offering new opportunities for investors. Factors such as a careful and well-regulated approach to real estate development, a strong tech-driven economy, and a sustained demand for housing would ensure that Bengaluru would continue to shine as a prudent choice for investors seeking a more reliable and risk-averse residential market.

Was this article useful?