Growth in premium housing projects in Bengaluru – An Analysis Bengaluru has been witnessing a huge growth in the luxury housing segment ever since 2008, with prices going up by 30% to 40% every year. In fact, with the economic uncertainty of 2012, the prices went down in Mumbai and some other major cities, but Bengaluru’s prices remained stable. A report brought out by both Ernst & Young and Kotak Wealth Management has estimated that the number of ultra-high net worth buyers in India will triple by 2019, needless to mention that a huge chunk of these high-net-worth individuals (HNWI) are expected to be from Bengaluru. The increase in the number of HNWIs and the growth of industries in the city has increased the demand for premium villas and housing projects. The factor at work here is a sense of prestige and social status, where addresses and amenities have more importance than conveniences and basic necessities. With the astonishing high quality of living spaces that the premium housing brand offers, the price continues to rise and the endusers continue to buy these units. Indeed, the luxury real estate market in Bengaluru, in a way, is insulated from the highs and lows of the everyday economy. The reason behind the popularity of premium housing projects in Bengaluru Social infrastructure is crucial for a premium housing market, with the buyers looking more for amenities, luxuries, branding, quality of material and construction quality, location, population density, social status and more. Even as the real estate in Bengaluru is bogged down by unsold inventories, a dearth of affordable housing projects and a fairly flat market, high net worth investors and buyers in the city are aplenty, thanks to the ever booming IT and ITeS industries in the city. Bengaluru’s property market has seen more than 35 launches of high-end properties and villas in the last year. The reason for their popularity is simple – despite huge demand for affordable housingprojects, premium housing projects earn huge returns for the developers. The premium housing market consists of villas, high-end apartments, row houses, bungalows, houses, gated communities, lakeside condos and even smart homes. These projects are classified as luxury statements and their brand value is both intangible and priceless. They are equipped with state-of-the-art facilities and great innovations in terms of luxury features and amenities, with some projects boasting of a separate swimming pool in each floor. Key markets and trends in premium housing space in Bengaluru
North, North West and North East Bengaluru: North and North East Bengaluru are areas that have been growing rapidly in the past few years, with the government promising better connectivity and the proximity to the airport. There has been a spurt of premium housing projects here, within the Rs.1.3 crore to Rs.4 crore range. Hebbal, RMV Extension, Hennur and Yelahanka are seeing many premium housing projects coming up. Devanahalli is also seeing many luxury projects in the Rs.2.5 crore to Rs.5 crore price range, but it remains to be seen if the government amps infrastructure in these areas. Despite the Peripheral Ring Road, the traffic and congestion in this area is immense and it remains to be seen whether the projects in this area will gain traction. Similarly, in North West Bengaluru, the One Bangalore West project in Dr. Rajkumar Road is an example of a premium luxury housing brand. The project was a runaway success. South, South West and South East Bengaluru: Bannerghatta Road, JP Nagar, Banshankari, ITPL, KR Puram andKanakpura Road in South Bengaluru are coming up with large premium housing projects ranging from Rs.2 crore to Rs.5 crore. The prices in these areas are poised to increase further. East Bengaluru: Sarjapur Road and Whitefield are IT community hubs and rule the market in the city as far as premium housing projects go, with a new project being announced almost every six months. The proximity to the IT corridor boosts the value of these projects. People with huge discretionary spending power reside in these areas and are willing to pay more for world-class houses. Price trends in the premium housing market There are many factors that play a role as far as pricing is concerned. The more the amenities and specialized services, the higher the price tends to be. Despite many predictions, there has been no oversupply in the premium housing market in Bengaluru, with projects commanding high prices and no problems in terms of oversupply. The price of these premium projects range from 2 crores to 12 crores per unit and from Rs.20, 000 to Rs.30, 000 per square foot. As expected, the higher the price, the more readily available the units are, after all, this is a specialized category. However, the number of luxury villas in Bengaluru is poised to grow twofold over the next few years. The residential market in Bengaluru sees a cross-section of home buyers wanting affordable houses and then, on its own steam, you see the premium residential market growing leaps and bounds ahead of the rest of the categories. It is indeed a curious situation and it has a lot to do with Bengaluru’s multicultural nature. Source: CommonFloor.com For Latest Updates on Real Estate Updates, Property News and Cities Infrastructure Developments Visit: http://www.commonfloor.com/guide
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