In Bangalore, rental prices have recently experienced a significant increase, as evidenced by the 2024 Bangalore Real Estate Trends.
Nevertheless, recent data indicates that, despite the exorbitant prices, individuals increasingly opt to purchase homes rather than continue to pay exorbitant rentals.
Bangalore Real Estate: Generation Z Interest in Buying Home
According to real estate brokers, interest in home ownership has increased by 35 to 40% among Generation Z in the city, compared to data from the previous year.
Rising rental rates in Bengaluru have had a substantial impact on home purchase trends, resulting in a dramatic fall in the average age of first-time homebuyers from 42 to 34 during the last three years.
In some of the most desirable localities in Bangalore real estate, rental prices have increased by 45-50% in the last three years.
Currently, potential tenants may expect to pay between Rs 50,000 and Rs 65,000 per month for a two-bedroom apartment, in a desirable area.
And three-bedroom flats costing all the higher up to Rs 80,000.
According to a survey, of an online property listing business, in the first half of 2024, millennials and Generation Z accounted for more than 60% of property transactions on their platform in Bangalore.
The sources added, there was successful closure of numerous deals ranging from Rs 1-2 crore, primarily involving buyers aged 28 to 40.
Sale of flats in Bellandur and Indiranagar for over Rs 1 crore each were opted.
Tenants opted to Buy rather than Pay Rent:
The majority of young buyers are either interested in properties that are available to move in immediately or are willing to wait for new listings that are less than six months old.
Many individuals in Bengaluru are attracted to investing in one-bedroom units that are priced below Rs 1 crore due to their potential for rental income.
For end-users, the ideal price range is between Rs 1 crore and Rs 1.5 crore in sought-after neighborhoods like Indiranagar, Koramangala, and Whitefield.
The rising cost of living has made people even more inclined to buy homes.
According to the Karnataka Economic Survey 2023-24, the state’s income per person went up by 5.8 percent from 2022 to 2023.
Aside from that, prices in Bengaluru have gone up a lot since the pandemic.
Young people are also interested in buying homes because the rental returns are good. Rental returns have skyrocketed to 4 to 5 percent in Whitefield, Bengaluru’s eastern IT corridor.
New parents in Bengaluru preferences:
Most couples or new parents are deciding on buying a house considering their expected 15 to 20-year lifetime. They also said that the choice of location would be very important in the decision-making process since it would call for close access to schools and businesses, to have a work-life balance.
For young parents, having a residence in a locality distant from school and a job can have a huge impact on their quality of life. They prefer localities which are closer to all these.
Square Yards Data on Bangalore Real Estate:
A proptech website called Square Yards says that there were 28,356 transactions in Bengaluru in the second quarter of 2024.
This is 19% more than the previous quarter. During the same period, reported sales went up by 30%, going up to ₹19,631 crore by the end of the June quarter.
Despite difficulties like as flooding and water shortages, the demand from homebuyers continues to be exceptionally resilient.
This is supported by the growth of the information technology sector as well as the combination of full-time and hybrid working arrangements.
Even though the East and Southern suburbs continue to be appealing, their research revealed that the Northern suburbs were increasingly becoming major regions of interest for both apartments and plots.
Developers with solid brand reputations, especially those that produce high-quality projects, and have a good name in Bangalore real estate, are seeing successful launches with quick sales absorption.
Bangalore Real Estate Market Pushing Prices: Anarock Report
A report by real estate company Anarock shows that Bengaluru saw the highest annual rise in property prices—32% from ₹5,900 per square foot at the end of H1 2023 to ₹7,800 per square foot at the end of H1 2024.
Most home prices in the IT city have gone up by 57% in the last five years.
According to the source, average home prices in the city were ₹7,800 per square foot by the end of H1 2024, up from ₹4,960 per square foot at the end of H1 2019.
North Bengaluru has the highest average capital value in the survey, at over ₹7,000 per square foot.
By 2024’s conclusion, the average capital values of the city will have increased by 10%, according to an expert.
This is expected to happen in prime areas and established tech corridors, where growth could be faster.
Based on a study by Anarock, there were about 45,420 residential units for sale in the city by the end of the first half of 2024.
Compared to the numbers from the five years before, which were about 64,680 units by the end of the first half of 2019, which means that the number of unsold units has dropped by 30%.
At the end of the first half of 2024, the inventory overhang in the city reached a record low of eight months. This represents a substantial decline compared to the fifteen months seen in the latter part of 2019.
Summing Up:
In Bangalore, there is a growing trend among Gen Z and Millennials to favor purchasing properties over renting them. This suggests that an increasing number of individuals are opting to reside and work in the urban area.
Due to increasing rental costs and a robust economy, many young employees have come to appreciate the advantages of homeownership. This transition is affecting not only the real estate industry but also the projected future of Bengaluru as a thriving city.
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