North West Bengaluru’s Residential Prices Expected to Surpass City Average Amid Rising Demand

North West Bengaluru is quickly establishing itself as a key growth area in the city’s real estate market. Areas such as Malleshwaram, Rajajinagar, and Peenya are expected to experience residential price increases that outpace the city average over the next five years. According to data from CRE Matrix, the region has witnessed a dramatic rise in both demand and supply of residential units. Between 2022 and 2023, residential supply grew by 29%, while demand surged by 64%. In 2023, the region saw a demand for 3,405 units compared to 2,639 in 2022, and supply increased from 1,221 units to 2,012 units.

This surge has resulted in a robust demand-supply ratio (D/S Ratio) of 1.7x, placing North West Bengaluru ahead of other macro-markets such as North East (Devanahalli and Yelahanka) and South East (Outskirts of Whitefield). This ratio indicates a healthy market dynamic where demand significantly exceeds supply, driving up property prices.

Significant Price Appreciation

Residential property prices in North West Bengaluru have experienced substantial increases. As of August 2024, the average price stands at ₹9,912 per sq ft, up from ₹7,553 per sq ft in 2023—a remarkable 31% rise. While 57% of units sold are priced below ₹1 crore, there is a noticeable uptick in demand for higher-end properties priced above ₹2 crore. This shift reflects a growing market for more premium real estate options.

Developer Activity and Major Investments

The region's appeal is further enhanced by the presence of major real estate developers. Companies such as Brigade, Phoenix, Prestige, Vaishnavi, Puravankara, and Sattva Group have established a significant footprint. Additionally, high-profile entrants like Godrej Properties and Birla Estates have made notable investments. In November 2022, IKEA India opened its third store in Nagasandra, highlighting the area’s commercial potential.

Birla Estates, the real estate arm of Century Textiles and Industries, has partnered with MS Ramaiah Realty LLP to develop a 52-acre land parcel. Meanwhile, Godrej Properties has acquired a 5-acre site to launch its first project in North West Bengaluru. These investments underscore the region's growing importance in the real estate market.

Infrastructure and Connectivity Enhancements

A major driver of growth in North West Bengaluru is its improving infrastructure and connectivity. The region benefits from ongoing metro projects, which enhance accessibility to other parts of the city. Additionally, planned infrastructure investments totaling around ₹16,000 crore are expected to further boost the region's attractiveness.

In contrast, areas such as the Outer Ring Road (ORR) and Whitefield are struggling with severe congestion and underdeveloped public transport systems. This has led to high rental costs and market saturation in these areas, making North West Bengaluru an appealing alternative for both residential and commercial needs.

Office Space Market Insights

North West Bengaluru is also emerging as a competitive player in the office space market. With an existing office stock of 2.1 million sq ft and a recent addition of 8 million sq ft over the last two years, the region is well-positioned to meet growing demand. Prime office assets in North West Bengaluru are now competing with prominent properties in ORR and Bengaluru North.

Despite faster rental growth in ORR, North West Bengaluru is projected to see annual rental increases of 6-8% over the next five years. The region's limited new supply—contributing only 5% to the city’s under-construction office space—ensures that rental rates will remain competitive. Leading developers such as DNR, Salarpuria Sattva, Brigade, Puravankara, and Prestige have planned substantial projects, providing ample opportunities for businesses looking to expand or relocate.

Future Outlook and Implications

North West Bengaluru's rapid development is setting a new benchmark in the city's real estate market. With residential prices poised to surpass the city average, driven by strong demand, strategic developer investments, and infrastructure improvements, the region is emerging as a key area of growth. As other parts of Bengaluru face challenges like congestion and saturation, North West Bengaluru offers a promising alternative, making it a focal point for future urban development. This trend not only highlights the area's rising appeal but also suggests a shift in the city's real estate dynamics, positioning North West Bengaluru as a leading contender in shaping Bengaluru's future.