Demand declines 19.0% q-o-q

• Demand for luxury homes was sluggish during the quarter. Homebuyers are in a wait-and-see mode as they await the launching of some prominent projects well-established developers over the next 6-12 month period. This fence-sitting approach has caused sales to be stifled during the quarter.
• Projects that are under construction in the city saw greater capital value appreciation than completed projects. This reflects the preference of buyers for new launches with better amenities and larger units.

New launches down 59% q-o-q

• High-end residential supply was down q-o-q. A large number of high-end project launches is expected in the next year.
• Several major launches during the quarter were by reputed developers like Purva Meraki, Vista Lalbagh, Spencer Oaks, and Blisston.

Overall rents and capital values increase q-o-q

• High-end apartment rents rose by 1.2% q-o-q as employees increasingly return to the city and demand from senior professionals has also risen. The delivery of several projects was also delayed due to COVID-19, causing rental housing stock to remain limited and pushing rents up, especially since demand has returned for rental accommodation.
• Capital values showed an increase of 2% q-o-q with healthy buyer demand, cost-push inflation in construction costs and rising land prices being key factors contributing towards the increasing trend for prices.

Outlook: Luxury home sales and launches to remain robust in 2023

• The luxury residential segment in Bengaluru is expected to retain its healthy momentum that was also visible over the past 12 months or so. While the market has been driven by end-users, it has also benefited from investors looking for medium- to long-term investment opportunities in projects under construction.
• Luxury home prices are likely to rise next year as well, as developers are confident of the strong housing market dynamics and consumer homeownership needs that will likely drive demand needed to support price growth.