Bengaluru, often dubbed India’s ‘Silicon Valley’ and ‘Garden City,’ has transformed into a bustling metropolis with burgeoning opportunities in both residential and commercial real estate. According to the ANAROCK report 'Bengaluru’s Real Estate - Your Gateway to Opportunity,' the city's average residential prices have surged by 57 per cent over the past five years.
Dr. Prashant Thakur, Regional Director & Head - Research at ANAROCK Group, noted, "Average residential prices in the city stood at Rs 7,800 per sq. ft. by H1 2024-end, compared to Rs 4,960 per sq. ft. at H1 2019-end. Bengaluru also witnessed the highest year-on-year jump of 32 per cent – from Rs 5,900 per sq. ft. by H1 2023-end to Rs 7,800 per sq. ft. by H1 2024-end."
The rise in prices is driven by soaring construction costs and escalating demand from investors and buyers, following a period of stagnation due to structural reforms and the 2019 pandemic. Post-COVID-19, the demand has significantly increased, prompting developers to hike prices.
"Increased new launches in Bengaluru's premium and luxury segments in H1 2024 also contributed to the rise in average prices," added Dr. Thakur. "Notably, out of the total new supply of approximately 32,500 units in H1 2024, nearly 75 per cent were in the premium and luxury segments."
Among the city's four quadrants (East, West, North, and South), North Bengaluru commands the highest average capital value, exceeding Rs 7,000 per sq. ft.
Available Inventory
By H1 2024-end, Bengaluru's available stock stood at approximately 45,420 units, down from around 64,680 units at H1 2019-end, marking a 30 per cent decline over five years. Despite robust new supply since 2019, the declining stock is seen as a positive sign. Furthermore, the inventory overhang in the city fell to a record low of 8 months by H1 2024-end, from 15 months in H2 2019.
The report also highlights the surging demand for office space in Bengaluru since 2020, recently reaching an all-time high, underscoring the city’s attractiveness and thriving business environment. Average office rentals across key markets in Bengaluru saw annual growth of 4 per cent to 8 per cent.
Although the IT-ITeS sector's dominance slightly decreased year-on-year, coworking space providers and manufacturing/industrial occupiers expanded their presence by 3 per cent and 2 per cent, respectively. This indicates a potential diversification of the city’s tenant base and a maturing business ecosystem.
Ongoing Challenges
The report addresses Bengaluru's pressing urban challenges and the action plans underway to mitigate them, including traffic congestion, water scarcity, air pollution, waste management deficits, and increasing urban sprawl leading to flooding. Key infrastructure projects underway or proposed to tackle these issues include the Multimodal Logistics Park (MMLP), Bengaluru Suburban Rail Project (BSRP), Namma Metro Phase 2 and 3, Bengaluru Satellite Ring Road, new expressways, Airport City, and various corridors passing through Bengaluru such as Industrial Corridors, Economic Corridors, Infrastructure Corridor, and Business Corridor.
Several key infrastructure projects are in the pipeline to address these challenges, including the Multimodal Logistics Park (MMLP), the Bengaluru Suburban Rail Project (BSRP), Namma Metro Phase 2 and 3, the Bengaluru Satellite Ring Road, new expressways, Airport City, and various corridors passing through Bengaluru such as the Industrial Corridors, Economic Corridors, Infrastructure Corridor, and Business Corridor.
Bengaluru’s evolution into a dynamic metropolis continues, offering vast opportunities in real estate and reinforcing its position as a premier destination for both living and business.
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