APPD Market Report Article

Bengaluru

August 26, 2022

Dr Samantak Das, Head of Research, India & Sri Lanka

1.2%

INR 41.0

N/A

High-end residential sales decrease q-o-q

  • The rupee depreciation and the still-low mortgage rates are key demand drivers, with demand for high-end homes coming from high-net-worth individuals as well as NRIs. The need for bigger homes and premium amenities is also a big factor that propels homebuying dynamics in the high-end residential market.
  • While the preference for ready-to-occupy properties continues to be a dominant trend in the high-end homes market, new projects by well-known developer brands are also gaining traction. Central and well-developed secondary locations or those near developing hubs are witnessing great traction in terms of sales.

New launches up in 2Q22

  • In 2Q22, Bengaluru saw an increase in new launches in the high-end residential segment, with leading developers announcing new projects during the quarter, owing to rising demand for such homes. The secondary submarket saw the most project launches, followed by the Bellary Road and Prime City submarkets.
  • Some of the major launches by known developers like Prestige, Sobha, Assetz and Brigade, among others, were also the most active during the quarter in terms of sales activity.

Overall capital values increase 1.1% q-o-q

  • Capital values increased slightly when compared to the previous quarter, owing to an increase in the price of construction materials, such as steel and cement, with developers passing on these costs to the buyers to some extent over the past few months.
  • Rents rose slightly during the quarter. With IT and corporate employees returning to office locations, schools reopening, and migrants returning to the city, which have caused the demand for rental properties to increase, putting upward pressure on rents.

Outlook: The high-end residential market to remain robust over 2022

  • Developers are expected to launch larger-sized houses and apartments in the medium-term to capitalise on changing consumer preferences in the post-pandemic era.
  • As supply hotspots and buyer sentiment are driven by location and associated infrastructure development, suburban locations that are becoming homogeneous development hubs will emerge even stronger.

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

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