Bengaluru’s real estate market, driven by IT, the start-up ecosystem, and infrastructure development, is seeing increased demand, with high-net-worth individuals (HNIs) leading the investment surge, according to industry analysts.
India’s HNI population is projected to double to 1.65 million by 2027, with real estate accounting for 32 per cent of their portfolio investments, as stated by an ANAROCK report.
The recently reported high-profile property purchase by Infosys Founder NR Narayana Murthy in Kingfisher Towers has spotlighted this trend.
The share of luxury homes in total sales surged to 28 per cent in 2024, up from 16 per cent pre-pandemic. High-end properties in Mumbai, Delhi, and Bengaluru are top picks, with Goa, Alibaug, and Jaipur emerging as favoured second-home destinations, ANAROCK report noted.
Supply rises to match demand
The residential market in Bengaluru which was primarily driven by mid-segment priced between ₹40 lakh to ₹80 lakh is witnessing a shift towards premium and luxury segments priced from ₹80 lakh onwards, observes Priyanka Kapoor, Senior Vice President, Research & Advisory, ANAROCK.
In the first nine months of 2024, 10,785 luxury units were launched in the city during the first nine months of 2024, totaling 41 percent of the total new supply across all budget segments.
Several micro-markets across the Central, East, Southeast, North, and South periphery are emerging as luxury residential hotspots owing to improved connectivity with the Bengaluru Business Corridor and IT districts through the Outer Ring Road and existing as well as upcoming metro, notes Anshuman Magazine, Chairman & CEO, CBRE India, Southeast Asia, Middle East & Africa.
In addition to established areas like Sarjapur Road, Whitefield, and Thanisandra Main Road, regions such as Doddaballapur, Bagaluru, and Devanahalli are also attracting HNI investments. These localities have witnessed the launch of several high-end projects, including villas by leading developers, further cementing their appeal, notes Kapoor.
Shveta Jain, Managing Director, Residential Services, Savills India, explains the rising demand by highlighting Bengaluru’s status as an IT hub, its improved connectivity with major metros, and the growing preference for gated communities with high ROI potential. “The reliability of investing in tangible assets, particularly during uncertain times, has further reinforced this trend,” she remarks.
In 2024, favorable economic conditions, including relatively stable interest rates and rising disposable incomes, have strengthened HNI confidence in real estate investments. Additionally, the growing volatility in global financial markets has led many to view Bengaluru’s luxury properties as a safer, high-value asset class.
The policy repo rate remained unchanged at 6.5 per cent. The stability in the policy rate, along with moderated inflation, has fostered an encouraging environment for housing demand and boosted investor confidence, added Jain.
Moreover, young start-up founders and professionals with high disposable incomes are increasingly diversifying their portfolios to include real estate, departing from their earlier preference for other asset classes.
Furthermore, GCCs of multinational companies have been actively leasing office spaces in Bengaluru, driving demand for residential properties near these hubs, notes Kapoor.
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Published on December 22, 2024
https://www.thehindubusinessline.com/news/hni-investments-in-bengaluru-real-estate-surge-as-it-and-start-ups-drive-growth/article69015533.ece
