The capital of Karnataka and the Silicon Valley of India has been proven to be a hotspot for the real estate market. The city has become home to several IT companies and startups alike. With a 40% share in the Indian IT industry, the city has seen a remarkable migration for many decades. With the rise in technology and the increased population in the city, Bangalore’s real estate market has been booming over the past decade. The growth index of the city topped that of any other in South India. Bangalore with its charm has never been disappointed to lure investors, settlers, and property buyers. In the last decade, Bangalore has seen a significant hike in property prices, especially in areas like Indiranagar, Jayanagar, and Whitefield. Let’s walk through the evolving Bangalore’s Real Estate market in the last decade and the reasons behind it.
Reasons for the hike in Bangalore’s property prices
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Thriving IT sector – Starting in the 1980s, the IT sector in Bangalore flourished through the years. The presence of significant Indian and global tech companies has aided in Bangalore’s transformation into a tech powerhouse. Being home to companies like Infosys, Google, Tata Consultancy Services, Amazon, Wipro, and Microsoft has contributed to attracting population from all over India while being catalysts for surrounding area development. Whitefield, HSR layout, and Electronic City are among the key areas packed with startups and tech companies. These developed areas have been popular among IT professionals for their state-of-the-art facilities, and easy accessibility. There is a clear relationship between the developing IT sector and increasing property prices around the area. The emergence of the IT sector in Bangalore has significantly influenced the surge in property prices. The effect of this trend has resulted in increased demand for commercial and residential property and is specifically evident in areas such as Electronic City, Whitefield, and HSR layout.
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Connectivity and Infrastructure Development – The surge in property prices in Bangalore in the past few years is attributed to the rapid development of infrastructure. Major projects to better the city’s connectivity have been a priority. Along with metro rail connectivity, the city has also been focusing on its road connectivity, by constructing elevated expressways, wider roads, and flyovers to improve connectivity to various parts of the city. Metro Rail Phase 2, Bangalore-Mysore Expressway, and Bangalore Peripheral Ring Road are among some of the major projects that are in progress to improve accessibility by reducing traffic congestion. These initiatives taken to improve infrastructure and connectivity, are among various reasons for domestic and international companies to choose this city for their operations. Many areas like Electronic City, Yelahanka, and Marathahalli being home to the major IT companies, and well-connected to various parts of the city have expanded the city into zones that were once thought to be outskirts. Home buyers and investors are looking for properties in these easy-access and well-connected areas, increasing property prices. Amenities within access to the residential areas add a significant value to the properties for instance healthcare facilities, eminent educational institutions, shopping centers, and entertainment zones are considered to be the basic social infrastructure home buyers look for in an area. The migrating professionals in search of job opportunities have created a high for residential complexes around the city, resulting in increased property prices.
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Rapid urbanization and job opportunities – The thriving IT sector in Bangalore has aided in the overall growth of the economy in the city by creating job opportunities, attracting foreign direct investment, and improving quality of life. The boom in the IT sector has also stimulated the growth of companies in auxiliary industries like the E-commerce, Aerospace, and Biotechnology industries. The city has managed to attract a many professionals and talent from across the country with its diverse job market. The steady increase in the influx of individuals to Bangalore seeking better career prospects increased the demand for better residential property. The increasing demand for housing options and commercial property with more companies establishing in the city, has resulted in the boom of Bangalore’s real estate market. Home buyers are seeking properties in areas with IT hubs for convenience to commute to work and other amenities like schools, hospitals, and entertainment centers, resulting in the surge of property prices in the last decade.
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Limited Land Availability – The steadily growing population and limited land availability for real estate development have hiked the property prices in the hotspots of the city. There has been immense pressure on the limited land available due to the migration of people from across the country and rapid urbanization. With the increase in demand for residential property, developers are being challenged to find satisfactory land for new projects. The scarcity of prime land in the hotspots in the city in turn is pushing developers to explore alternate locations on the outskirts like Sarjapur, Electronic City, and Whitefield to meet the demand. For instance, the average property prices in Electronic City have seen a significant hike in the last decade, with prices in 2014 being around Rs. 3,000 per sq. ft. while the current prices being approximately Rs. 5,100 per sq. ft. These areas once considered outskirts are now swarming with commercial and residential hubs.
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Changing Lifestyle – One of the reasons for the increase in property prices in Bangalore is the changing lifestyle preferences of the residents. Over the last 10 years, the expectations and demands of Bangalore residents have shifted. Their main focus now is on a luxurious and comfortable living experience with an elevated emphasis on amenities. The changing demand is being met by the developers by launching new projects with a wide range of amenities like clubhouses, fitness centers, multipurpose halls, swimming pools, play areas for children, and landscaped gardens. Gated communities with enhanced privacy and security have also gained popularity. The launch of lifestyle-centric projects like SOBHA Royal Crest offering amenities ranging from swimming pools, 24/7 security services, and co-working spaces with top-notch technology cater to the need for a luxurious living experience for Bangalore residents. Developers are exploiting the willingness of home buyers to pay a premium for the status, convenience, and comfort provided by these residential properties, in turn resulting in an increase in property prices.
It can be said that, even with the ups and downs in the Bangalore’s real estate sector, it has only been growing in the last decade. The flourishing IT sector, increase in population, rapid urbanization and changing preferences are a few reasons for the increase in prices of property in Bangalore. Overall, the growth of this market has only attracted investors and property buyers, making it a hotspot for both developers and investors. For more accurate information about the Bangalore’s real estate market in Bangalore, consult with the best local property management company, Jones Asset Management.
