Bangalore – Residential Real Estate Overview

Bengaluru residential market continued to remain steady in H1 2023, despite facing multiple headwinds in the last one year arising from the sharp rise in borrowing costs, volatility in IT/ITeS job market, increase in construction costs etc. 

During H1 2023, Bengaluru registered residential sales volume of 26,247 units, a moderate 2% de-growth compared to the corresponding period in 2022. Notably, the moderation in sales is primarily due to the exhaustion of ready to move inventory which is failing to cater to the growing demand. However, residential launches have remained buoyant, as developers continue to capitalise on the rising demand. During H1 2023, Bengaluru registered 23,542 units of residential launches, an 11% growth over the previous year. 

Segment-wise, there has been a substantial shift across the price categories. Sales of the INR 5mn house segment, being relatively more sensitive to interest rates, witnessed a significant contraction of 38% YoY in H1 2023. The share of residential sales in this category also diminished to 20% in H1 2023 from 31% a year ago. 

The mid segment residential sales continue to dominate the demand comprising a share of 50% of the total sales in the city with sales growth of 10% YoY in H1 2023. Owing to the improving economic profile of the city, there has been a significant increase in the inclination of consumers towards luxury housing in Bengaluru. The sale of residential units in the price range of INR 10-20 mn grew by 17% YoY, and the sale of units priced above INR 20 mn spiked sharply by 46% YoY during H1 2023.