Synopsis- In past 5 years, real estate has grown exponentially in Bengaluru. Many micro-markets have become profitable investments. Regions such as Whitefield, Sarjapur Road and Hebbal have given tremendous returns of ROI as well as rental income, due to the development in the field of IT, metro connectivity and a surge in housing demand, making the city one of the best property markets for investors.
Bengaluru, which came out as one of the worst-hit cities during the pandemic, has undergone a drastic transformation to become the hottest real estate market in India. Prices for homes have surged across multiple micro-markets in the City due to the significant increase in demand for high-end homes, as well as the growth of its tech sector, startup culture, and metro connectivity.
Bengaluru Real Estate- Pre and Post Covid
Pre-Covid, the realty sector in Bengaluru was slowly gaining traction but with a moderate 4-5% rate. The IT sector was the largest driver of property demand as areas such as Whitefield, Sarjapur Road and Electronic City experienced moderate price increases as a result of office growth and migration. The market did slow down for a short time during the pandemic, however, as construction halted, home purchases were postponed, and uncertainty surrounded the economy.
Post pandemic, the market has seen a recovery, triggered by the hybrid work culture, demand for larger homes, growth in startups, metro expansion and infrastructure projects in East and North Bengaluru. Some saw price appreciation of up to 10-15% in the past year, while others saw rental appreciation of nearly 20-25% in the last few years.
Why Bengaluru became a post-covid Real Estate Hotspot
- IT and start-up growth: Bengaluru’s tech ecosystem grew at a rapid pace after Covid with global companies, GCCs and startups scaling up its presence in particular East and North Bengaluru. This immediately increased demand for housing close to areas of employment.
- Emergence of hybrid work culture: The surge in work from home and hybrid culture led to a rise in demand for larger homes, gated communities and homes with improved lifestyle amenities, driving up the residential prices.
- Namma Metro connectivity boom: This has had a huge impact on the property values of the surrounding micro-markets, especially Whitefield and North Bengaluru, with the expansion of the Namma Metro.
- Higher rental demand: The strong rental demand as professionals came back to offices and migrants back to the city resulted in a high rental demand and hence higher rental yields in major residential hubs.
- Move away from the city: With the post Covid days, the buyers opted for areas with less traffic and ample living room, thereby giving a boost to areas on the outskirts of the city such as Sarjapur Road, Devanahalli, Hennur etc.
- Increased investor trust: Bengaluru has been a better performer in the real estate sector since the outbreak of Covid than many other Indian cities, giving more confidence to domestic and NRI investors to invest in the city for long-term capital gains.
- Narrow supply in high-demand regions: The premium housing market expanded at a faster rate than demand in well established tech corridors which resulted in high price increases in key premium market areas.
Top 5 areas in Bengaluru with highest ROI Post Covid
1. Whitefield
The operational Purple Line Metro, significant IT presence and high-grade residential demand were a few reasons that made Whitefield one of the major winners of the post-Covid era in Bengaluru. Rental growth was solid in the area as tech workers returned to the office. The demand for housing is still continuing to grow in the vicinity of ITPL and EPIP Zone, with major companies continuing to do so, making Whitefield one of the safest long term investment zones in Bengaluru.
2. Sarjapur Road
Sarjapur Road went from being a new suburb and became one of the best real estate corridors in the city after Covid. The area’s connectivity facilitated the attraction of both end-users and investors to Electronic City, ORR and Whitefield. Additionally, the corridor is set for more infrastructure developments, such as Peripheral Ring Road and metro expansion, that should continue to drive up prices.
3. Hebbal
The strategic location of Hebal around the airport corridor and big commercial developments witnessed the major appreciation of the town. Post Covid, there was a huge demand for luxury and premium housing as people started to buy larger homes and better connectivity. Today, Hebal is regarded as one of the best long-term investments destinations in Bengaluru.
4. Electronic City
Electronic City got a lot of investor interest since the Yellow Line Metro announcement and the advantage of affordability. The entry prices were still lower and the rental demand was unabated as compared with Whitefield or Hebbal. Despite the favorable price-to-rent ratio, and the solid TDP of IT workers, the market remains appealing to first-time investors.
5. Hennur Road
The Covid era saw a rise in popularity of Hennur Road with reduced density living, better infrastructure, and the location’s attraction to Manyata Tech Park and the airport corridor. There was a sudden surge in the demand for gated communities in this area. Multiple infrastructure upgrades are going on in North Bengaluru making Hennur Road an attractive buy and hold investment area.
Conclusion
The real estate market in Bengaluru has witnessed a complete metamorphosis in its landscape since the onset of Covid, and the few micro-markets that have seen vertical growth have seen stellar returns because of the booming growth in technology, infrastructure development, and housing demand. Although prices have already increased substantially, the continued metro projects, commercial expansion and the increasing population in the city due to its growing workforce indicates that the real estate boom in Bengaluru is far from ending. The city has continued to be one of the top markets in India for long-term capital appreciation.
Written by Boyapati Sai Jasmitha
