Despite a seven per cent increase in housing prices, the city has witnessed excellent housing sales in 2022. Read on to know more
Industry experts consider a hike of a maximum of six per cent as a manageable increase for consumers. However, despite Bengaluru’s housing prices breaking the maximum consumer-acceptable limit (read: a seven per cent increase), the sales momentum in the city remained strong in 2022. And this can be testified by Knight Frank India’s H2 2022 report, which concluded a 40 per cent YoY growth in housing sales in Bengaluru as compared to 2021. As per the report, Bengaluru also stands in the second position, after NCR (67 per cent rise in housing sales as compared to 2021), in the housing sales table.
So, despite the price rise, what has helped Bengaluru stay as homebuyers’ favourite choice?
- Elaborating on the same Shantanu Mazumder, executive director, Bengaluru, Knight Frank India lists down the four most important factors that have helped the city attract numerous homebuyers:
- Employment opportunities: Ample employment opportunities in the city in high-paying service sectors primarily IT/ITeS had increased migration into the city. Favourable income growth further drives consumers to make home purchases;
- Integrated township: In recent years, many integrated townships were developed in the city with amenities and conveniences such as commercial, retail centres, schools, hospitals, etc within the ecosystem. The comfort and the convenience factor of this has encouraged homebuyers to make purchases in Bengaluru;
- Developer confidence: The credibility of developers in delivering a quality product within a reasonable timeline has encouraged potential homebuyers;
- Mix of apartment sizes: When compared to other metropolises, Bengaluru offers products across the spectrum.
Adding to him, Prashant Thakur, senior director and head (research), Anarock Group says, “Bengaluru has always been a unique real estate market. Heavily driven by IT/ITeS industries, it is a city where most of the housing demand comes from end-users. The residential sector in the city has withstood the test of time and emerged far more resilient than most other major cities not just before the pandemic but even after it. Even while sales in other cities picked some momentum only post the pandemic-infused lockdown relaxation, Bengaluru housing sales did well even during the lockdown. The fundamentals of the city–right pricing, better quality products, timely delivery–give it an upper edge against other cities. Also, the larger customer base in the city comprising IT/ITeS professionals were least affected by the pandemic and hence have been coming forward to take the plunge.”
What is the road ahead?
“The mid-segment houses priced between Rs five and Rs 10 mn will continue to remain in demand. Since Bengaluru is an end-user-driven market, with a large share of salaried-class employees in the service sector, salary growth will continue to push demand for this category. Also, the share of residential sales in the price category greater than Rs 20 mn has been increasing in the last few years, primarily due to the increase in HNIs and UHNIs in the city,” says Mazumder. “The city has the lowest inventory overhang (of 14 months) among all other top six cities. This indicates that there is robust demand and the momentum is likely to continue in 2023 as well,” concludes Thakur.
