The real estate sector in India has evolved at a rapid pace over the past few years. The government has projected that India shall become a USD $5 trillion economy by 2024-25. For the real estate and construction sectors, there have been numerous challenges, from stressed demand-supply ratio, to the financial health of companies, especially as the sector’s compliance to regulations are being discussed. These have bled the industry, especially post the 2008 global financial crisis.
Cities like Mumbai and Delhi have always been leading in the real estate space. Bengaluru, touted as the Silicon Valley of India is one of the fastest growing cities in the country. With a population of 8.5 million, the city is a bustling nerve-centre to the country’s economy. It is the fastest growing metropolis in the country after the NCR.
Booming millennial workforce
The booming millennial workforce in the garden city has enabled Bangalore’s real estate to grow significantly. Bangalore has always been one of the active residential market and now is also known for having sustained demand for commercial space. According to a NASSCOM report, 2018, Bangalore is one of the fastest growing technology start-up hubs in India with nearly 7,700 registered start-up firms. Of this, approximately 1,200 new start-ups were registered in 2018 alone.
Various govt. reforms:
However, the introduction of reforms like RERA & GST has made the sector go through significant improvements. As a business hub, the city caters to the technology and other services requirements of companies globally; no wonder then, that Bengaluru attracts a huge ratio of India’s highly-skilled workforce.
Rapid real estate growth in Bangalore:
The year 2018 re-established Bangalore’s position in the commercial space. According to a JLL report, the city accounted for the highest absorption of office space at 7.9 million sq. ft. in the first nine months of the year.
Bangalore also fared decent in the residential segment. According to a recently conducted research, about 870 projects were launched in 2018. About 50% of this new supply was in the mid-segment (Rs 40-70 Lakh), followed by 24% in the affordable segment (Less than Rs 40 Lakh) and 26% supply in the luxury segment (Rs 70 Lakh and above).
The well-educated, mostly millennial and aspirational population of Bangalore has unique requirements, with regards to its home buying preferences or even with working space. Considering these there are a few emerging trends that are expected to define trends in the near future.
Boost in affordable housing segment:
Affordable housing witnessed a growth of 22% in sales during 2018. In the recent Budget announcement, the government has extended the deduction of interest on home loan by Rs 1.5 lakh to Rs 3.5 lakh and flat 1% rate for under-construction affordable housing to boost demand. Furthermore, the government has extended the benefit of Credit Link Subsidy Scheme (CLSS) on home loans for the Middle Income Group (MIG) under the Pradhan Mantri Awas Yojana (Urban) till the end of March 2020 and this seems to be a major push for the progression of affordable housing segment.
Ever expanding city landscape: Ideal destination for investment
Bangalore has already gained its reputation as one of the most preferred places for investments in real estate, especially among the well-heeled communities in the city. Luxury villas are not just witnessing demand from NRIs, but also from home grown demand coming from senior executives, entrepreneurs, among others. No wonder then, that there is a significant thrust on development in geographies such as Sarjapur, Hoodi, Whitefield, Kanakapura Road and Mysore Road.
Emerging trends – Co-living and student housing
Co-living and student housing is another popular trend among working millennials and students in Bangalore. The city has grown by leaps and bounds, in a very short span of time. In the short to medium term, the demand for real estate shall continue to climb. As the demand is rising, we are also seeing the city expanding and moving away from prime locations. Places like Sarjapur-Attibele Road, Whitefield Extension, Kanakapura Road and Yelahanka- Kogilu in North Bangalore are some of the localities gaining traction from real estate developers.
All in all, the real estate industry is witnessing an upswing, notably in the luxurious home, affordable home for co-living and students housing segment, where open space, amenities and a good rental yield are the key scouted priorities. The industry is not more dominated by certain
The industry is also witnessing active participation from many emerging real estate companies who are bringing new ideas and helping to grow the sector better. These players are being able to cut share from the traditional real estate companies.