APPD Market Report Article

Bengaluru

December 1, 2021

-0.7%

INR 40.5

N/A

Demand for luxury homes remains steady q-o-q

  • Demand for high-end residential properties remained stable during the quarter. Record low home loan rates, greater home ownership sentiment, the shift towards bigger home configurations and robust hiring in the IT/ITeS sector have been instrumental in driving demand in the quarter.
  • Homebuyers are looking for more space to reorganise their lives in the wake of COVID-19. The wealthy buyer is looking for a healthier and more holistic lifestyle. Homes that can provide additional facilities, like gyms as well as other amenities, and are part of self-sufficient townships, are most in demand.

High-end residential launches dip by 96% q-o-q

  • New launches dropped by 96% q-o-q. A prominent launch in the quarter was UKN Miraya Brunton. With the onset of the festive season, more launches in this segment are expected going forward.
  • Although developers remained cautious while launching new projects and are aligning their launch strategies with the actual market demand, new launches are likely to intensify in view of the growing demand for housing and the upcoming festive season.

Rents and capital values remain stagnant

  • Prices remained stagnant q-o-q. Many builders are extending various discounts in the form of No pre-EMI until possession, Customized EMIs and attractive festive offers linked to different events, to incentivise homebuyers.
  • Rents remained stable across all submarkets and remained below the pre-pandemic levels. The return on investment on luxury housing remained low.

Outlook: The demand for spacious homes to increase in the near term

  • Consumer preferences have changed with homebuyers now keen on a holistic living experience, keeping both sustainability and wellbeing at the centre of their homebuying decisions. The trend of larger homes is likely to stay and form a considerable part of sales in Bengaluru — at least for the next few months.
  • NRI buyers are also adopting the dual approach of luxe-living and work-from-home concept. More recently, in the wake of COVID-19, there has been a rise in premium real estate investments from such NRI buyers.

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

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