Bengaluru's Luxury Housing Sales Dip Despite Overall Real Estate Boom

The realty sector of India is on its surge, with significant growth in commercial, office, and residential properties. As per recent data from the India Market Monitor Q2 2024 report, CBRE South Asia reported that luxury housing sales units priced at Rs 4 crore and above increased by 27% in the January to July period. A total of 156,000 units were sold, and more than 153,000 new units across all categories were launched.

Though positive in general, the trend has been that Bengaluru a big real estate market like Mumbai and Pune has registered a decline in luxury housing sales. The city, which contributed substantial amount to residential sales in India during the period under consideration, witnessed a fall in the luxury segment. Sales of 200 units in the luxury category were recorded during the second quarter of last year, which came down to 10 units this year. The report indicated a possible shift in investor interest towards mid-segment properties in the city.

Anshuman Magazine, Chairman & CEO of CBRE India, South-East Asia, Middle East & Africa is still optimistic over the prospects of the housing market ahead. He lays this optimism at the altar of propitious homebuying sentiment, festive season promotions, and substantial land acquisition by developers. "We foresee a strong momentum in the housing market for the remainder of the year. These factors are expected to balance supply and demand dynamics and invigorate market activity", Magazine said.

Bengaluru's residential stock has increased from 2.9 lakh units in 2013 to almost 6 lakh in Q2 2024 at a fast clip. It is seen that the South, East, and North are the most active markets. To that end, 40,000 new units were launched in the city last year, and 55,000 were sold, with both largely driven by mid-segment housing. Key drivers, such as appreciation in rentals and return to the office, are the fundamental drifts that have led to this growth and helped reduce unsold inventory to a record low of 10%.

Looking ahead, the report Karnataka Horizon Navigating Real Estate Excellence in the South says Bengaluru's residential stock is likely to grow from the existing 6 lakh units to 8-9 lakh units by 2030. Growth areas would emerge in Bellary Road, Thanisandra Road, and Yelahanka in the North; Whitefield, Varthur, and Old Madras Road in the East; and Sarjapur-Attibele Road in the South East. More buyers are looking for property nowadays with advanced infrastructure, smart house technology, and clean and green environments that emphasize the changing tendencies of living in modern and well-equipped places.