Bengaluru to see sustained robust demand for luxury residential properties

Find out where demand could be coming from.

Analysts at JLL expect that demand for luxury housing in Bengaluru is likely to be sustained. 

However, some headwinds may be visible, with buyers from the tech industry likely to go slow and the long-term capital gains cap of INR 100 million becoming operational with the 31 March financial year-end, the announcement of which had also triggered a spate of high-value transactions in the residential segment.

Here’s more from JLL:

Developers are focusing on areas near the city’s information technology corridors, such as Sarjapur and Whitefield, which are now emerging as new corridors for high-end housing. North Bengaluru is also expected to see increased residential activity due to its proximity to the airport and excellent connectivity, along with upcoming infrastructure development.

Demand for luxury homes on the rise

The demand for luxury homes in Bengaluru has risen by 43% q-o-q in the first quarter of the year. While the city remains an end-user-driven market with a high proportion of salaried-class personnel in the service industry, it is witnessing increasing demand for homes in the price category of over INR 15 million, primarily on account of the rising number of wealthy people and aspirational lifestyles.

During Q1, there was an increase in demand for larger homes with excellent amenities and support infrastructure. This is because the city’s mid- and senior-level executives as well as the city’s wealthy class and NRIs are interested in buying or investing in such luxury properties.

New launches show a healthy growth q-o-q

High-end residential launches increased compared to the previous quarter and constituted a healthy 15.5% of the total quarterly launches. Most of the new launches were in the Secondary, Whitefield and Bellary Road submarkets.

Several major launches during the quarter were by reputable developers like Godrej Athena, Prestige Elm Park, Vista By Vista Spaces Okas and DivyaSree 77 Life.

Overall rents and capital values on an upward trajectory

The overall rents increased by 3.7% q-o-q, largely driven by high demand for apartments from top corporates wanting to be closer to tech and major city clusters. Also, a lack of new completions has hampered availability while demand has returned, causing rents to spike.

Capital values rose across all submarkets as demand remained healthy for residential offerings, giving developers the confidence to hike prices and even bring in new developments at prices higher than the prevailing market average.

Note: Bengaluru Residential refers to Bengaluru's prime residential market.