Bangalore Real Estate Scenario

The Indian economy is consistently reaching newer heights. With millions of rupees being invested by the government in infrastructure, the ripple effect is clearly being observed in the real estate sector too. Bengaluru is riding high when it comes to profitable returns from real estate investments. The city has the most quality-conscious market with respect to growth and standard. It is the IT sector that is driving the city forward as it contributes a lot to the income of the state as well as to real estate.

Well-paid professionals, budding entrepreneurs, rich businessmen and diplomats have found their haven in Bengaluru. Apart from them, NRIs are also looking to invest in property in Bengaluru. State-of-the-art infrastructure, excellent connectivity, weather etc. also play a vital role in shaping up the real estate scenario in the city. Demand for rental property is also steadily shooting up due to the presence of top educational institutions. Mid-segment apartments are always in demand.

While there has been a 30 percent appreciation for apartments, land appreciation is as high as 50 percent. A massive hike has also been observed for commercial and industrial properties in Bengaluru. Builders, developers and buyers have been positively influenced by the ever-rising real estate scenario in Bengaluru. Here, if an investment is well-planned, profits are sure to flow in. There is 100 percent FDI investment in this sector. According to a Cushman & Wakefield study, around 243,000 flats are expected to be supplied by 2018.

The market is now active after demonetisation, RERA, GST et al. In fact, builders and developers are finding it difficult to meet the ever-growing demand for apartments in the city. Supply of new housing projects in Bengaluru will be around 29 percent for LIG, 56 percent for MIG and only 15 percent for HIG. The cumulative demand for properties in the city is around 438,600 units until 2018, where 31 percent is for LIG, 44 percent for MIG and the rest for HIG. While the demand is massive, it is unlikely to be met in all the segments mentioned.

There is currently a large demand-supply gap in Bengaluru and it is close to 196,000 units. The city may soon witness a surge in units for HIG as top global companies are establishing a base here. The primary driver for MIG flats is the IT sector. There are a number of reasons for the demand-supply gap. Some of them are increase in construction costs, delayed approvals, Real Estate Regulatory Bill and Land Acquisition Bill. There has been a colossal pile-up of unsold inventory.

The Bengaluru government must take necessary steps to lessen the gap through proper planning, easing out the home loan process for the LIG and MIG segments, capitalising construction costs and through better funding for developers. Some of the top demand drivers for residential real estate in Bengaluru include rapidly increasing HNIs and NRIs, excellent connectivity options, growing IT and ITeS sectors, outstanding infrastructure and proposed IT Parks and SEZs.

Some of the localities that have become the preferred real estate investment choice for investors are Whitefield, Sarjapur Road, Marathalli, KR Puram, Electronic City, Hennur and HSR Layout. Investing in properties located here are sure to provide amazing returns.