When measuring real estate growth in India, Bangalore is said to have the most robust growth and trajectory patterns. Over the course of the past ten years, Bangalore has witnessed a significant amount of transformation pertaining to the real estate sector. The city went from owning one to two commercial houses to having multiple commercial houses. Are you planning to invest in the real estate market of Bangalore? Or looking for insights into how real estate has grown in the city? You’ve come to the right place.
Read on to follow the path of real estate in Bangalore over the past decade.
Real Estate in Bangalore (Trajectory over the years)
Bangalore is one of the fastest-growing cities in India, and its real estate market has been growing rapidly due to the city’s expanding economy and the influx of people moving to the city for work and education.
The real estate market in Bangalore has always noticed some unrealistic property prices. However, in the year 2007, the prices witnessed a decrease. For instance, in Sirajpur, the prices fell by 20%, and in areas like JP Nagar and Jayanagar, there was a 15% fall. The suburbs and outskirts of Bangalore saw a significant increase in demand due to the availability of affordable housing options.
Due to unrealistically inflated prices, there was a mismatch between the demand and supply in the city. As a result of which, approximately 5000 apartments were vacant, and dealers who earlier were selling 60 apartments boiled down to only selling six.
Furthermore, despite the rising property prices, the supply of housing units in Bangalore has also increased significantly over the past decade. Developers have been building more apartment complexes and gated communities to meet the growing demand for housing.
As property prices in the city centre continue to rise, many developers have started focusing on the outskirts of Bangalore, where land is more affordable. This has led to new residential and commercial projects in areas such as Whitefield, Electronic City, and Sarjapur Road.
Bangalore’s growing economy and the influx of multinational companies and startups have led to a growing demand for commercial real estate investment in the city. This has led to the development of new office spaces, co-working spaces, and commercial complexes.
The real estate market in Bengaluru is widely considered to be one of the most resilient in India, with a strong focus on the IT-ITeS sectors and a high demand from end-users. The market reached its peak between 2013-2015 but faced significant challenges in 2016-2017 due to the impact of DeMO, RERA, and GST. Despite these obstacles, the changes brought more transparency and accountability to the sector. The supply of new units increased by 20% in 2014, decreased by 16% in 2015, and saw a drastic drop in 2016-2017 due to macroeconomic factors. The absorption of units increased by 13% in 2014 and by 20% in 2015 but hit its lowest point in Q3 & Q4 of 2016.
Despite these challenges, the market remained strong in 2018, with an increase in both supply and absorption, highlighting the city’s resilience. Unlike other markets such as NCR, the Bengaluru market is driven by end-users, and developers are known for their professionalism and transparency.
Real Estate in Different Regions in Bangalore
Although the city has seen overall growth in the real estate sector, there are reasons for the trajectory in each region of the city.
- North Bangalore: After Kempegowda International Airport was established in Devanahalli in 2008, the North Bengaluru region experienced massive real estate activity. In the same way that Navi Mumbai, Gurgaon, and Noida developed into self-sustaining satellite towns, this area has the potential to live up to that mark.
- South Bangalore: Due to the city’s strong infrastructure, good connectivity, and a developing IT/ITeS industry, the southern region has always dominated real estate in the city. The upcoming metro project toward Bommasandra is an added advantage.
- East Bangalore: Being one of the most prestigious and prominent real estate zones in the city, east Bangalore has a high scope for future development. In comparison to other parts of Bengaluru, East Bengaluru has seen the greatest number of new units available over the last five years. The reasons for this are mainly the high concentration of IT-ITeS companies in the area and the ease with which new developments can be developed on land parcels.
- West Bangalore: The current and upcoming metro rail developments will not only ease connectivity issues but also increase residential demand in the area. There is a potential for future growth of the real estate market in this region because of the availability of large land parcels at affordable prices.
Conclusion
In today’s favorable macroeconomic environment, an elevated interest of foreign investors and increased construction of infrastructure facilities drive the growth of real estate in the city. If you wish to gain more insight into the real estate market or are planning to invest in Commercial Real Estate, head over to the Bhive Properties website and get your queries answered.
Comments