Bengaluru's Residential Real Estate Market Thrives in Q1 2024: A Comprehensive Analysis

Bengaluru, often referred to as the Silicon Valley of India, has once again emerged as a frontrunner in the country's real estate landscape, showcasing robust growth and remarkable resilience in the face of economic challenges. In the first quarter (Q1) of 2024, the city witnessed an unprecedented surge in residential sales, reaffirming its status as a preferred destination for homebuyers and investors alike. Let's explore the dynamics of Bengaluru's real estate market and explore the key factors driving this phenomenal growth.

Record-Breaking Sales Volume:

As per JLL India report, Bengaluru witnessed a staggering 30 per cent year-on-year growth in residential sales volume, with a remarkable 16,995 units sold in Q1 2024. This exceptional performance follows a record-breaking trend established in Q4 2023, where the city recorded approximately 20,000 unit sales, underscoring the sustained demand for housing in the region.

Segment-wise Analysis:

The mid-segment and premium categories emerged as the primary drivers of sales, capturing significant market share. Apartments priced between Rs 50-75 lakh dominated the sales landscape, accounting for nearly 33 per cent of total sales, closely followed by the premium segment comprising apartments priced between Rs 1.0-1.5 crore, contributing 23 percent of sales. This diversification across price points reflects a healthy demand dynamic and broad-based consumer interest in Bengaluru's real estate offerings.

Investor Confidence and Market Sentiment:

As per CBRE report, the noteworthy aspect of Bengaluru's real estate boom is the strong investor confidence in under-construction projects, accounting for nearly 90 per cent of total sales. This trend signals a positive market sentiment and underscores buyers' faith in the city's ongoing development initiatives. Moreover, the decline in unsold inventory by six per cent compared to Q4 2023 and 20 per cent compared to Q1 2023 further reinforces the optimistic outlook prevailing in the market.

Micro Market Insights:

Within Bengaluru, specific micro-markets witnessed significant traction, with Whitefield emerging as the top performer, capturing a substantial 34 per cent share in sales. The area's proximity to major IT hubs and recent infrastructural developments, such as the extension of the metro network, have fueled its popularity among homebuyers. Bellary Road, strategically positioned near the airport, also garnered considerable attention, commanding a 27 per cent share in sales.

New Launches and Price Trends:

The quarter also saw a positive trend in new project launches, with a nine per cent increase compared to Q4 2023. Once again, Whitefield led the pack, contributing 37 per cent of the new launches, primarily in the premium segment. Rising demand and limited supply drove an upward trajectory in capital values and rents, with prices increasing by 3.5-4.5 per cent compared to the previous quarter and a significant 15 per cent year-on-year. The extension of the Namma Metro network to Whitefield and upcoming Phase 3 connectivity enhancements are cited as key catalysts driving price growth in these submarkets.

Bengaluru's real estate market exemplifies resilience, dynamism, and adaptability, as evidenced by its stellar performance in Q1 2024. With sustained demand, favorable market conditions, and robust infrastructure development, the city continues to attract homebuyers, investors, and developers alike, reaffirming its position as a premier destination for real estate investment and growth in India.