Bangalore is an extremely vibrant city with highly favorable demographics. The average age of the city’s population has dropped dramatically from 60 years to 30 years in two decades, and the average earning power of this population is arguably the highest when compared to the more established cities of India. As a result, Bangalore’s real estate market dynamics are also unique when it comes to financial clout and corresponding lifestyle preferences.
The city has one of the fastest growing real estate markets in India, in which luxury housing is now one of the most vibrant and dynamic segments. The growing demand for luxury housing can be attributed to the rise in the number of high net worth individuals (HNWI), the rapid pace of urbanisation, the influx of global lifestyle trends and the fast growth of service industries such as technology and financial services, which are propelling many middle-income group individuals into the HNWIs bracket. Also, growing interest from Non-Resident Indian (NRI) buyers’ in investing in luxury housing and encouraged more reputed developers to launch projects with exceptional facilities.
Other Key Demographic Triggers:
- Bangalore has only 42% of local population. Hence, it is truly a cosmopolitan city
- Bangalore has the highest number of software professionals in the world
- Bangalore has produced the highest number of professionals working in the USA, almost 60% of the Indian population abroad are from Bangalore
- Bangalore has the highest number of software companies in India – A whopping 212 companies
One of the major factors driving real estate consumption in Bangalore is the consistency of job creation, which surpasses all other Indian cities. In the last one decade, even after a serious slowdown in national and international economic growth, Bangalore has been consistent in generating the highest number of jobs for engineers and management graduates among all cities of India. It is a growing city both in terms of geographical expansion and in
providing livelihood to educated young Indians; yet it has still not lost its lifestyle attractiveness quotient.
Bangalore is resplendent with areas that can be defined as ‘posh’ both in terms of cultural richness and density of wealth. Residents of Vittal Mallya Road, Richmond Road, Ulsoor Road, Sadashivnagar and the by-lanes of Cunningham Road have always cherished the experience of living in independent houses. While these houses are now giving way to apartment buildings, these locations still retain their profiling as addresses that announce status and prestige.
Indiranagar and Koramangala are the preferred destinations of first-generation rich entrepreneurs who value an evolved lifestyle that does not require them to compromise on space. Bangalore’s elite continue to prefer these locations as against moving into newer areas which offer comparable lifestyle quotients, but lack the charm they are accustomed to.
The current rates for residential properties on Vittal Mallya Road range from Rs. 27,000-30,000/sq.ft. And go as high as Rs.42,000-45,000/sq.ft. In locations like Richmond Road, and Rs.29,000-30,000/sq.ft. on Sankey Road.
Considering the limited supply, both now and in the foreseeable future, these are extremely high premium locations with no supply overhang whatsoever. As a result, the capital appreciation potential is considerable. While luxury apartment costs ranging between Rs. 6 crore to Rs. 30 crore may seem exorbitant, they are in fact very reasonable when compared to the rates going in premium locations of established cities like Delhi and Mumbai.
The space and lifestyle that the luxury projects in these areas offer against a backdrop of unsullied charm and grandeur is clearly lacking in most other cities. A luxury apartment in Indira Nagar and Koramangala is still an attainable reality with prices ranging from Rs. 9,000-12,000/sq.ft. No other premium locations of other major Indian cities offer such prices in the luxury segment.
Bangalore’s newer luxury home destinations evolved primarily in the areas close to Satya Sai Ashram and the International Tech Park (ITPL), or Whitefield – a name whose genesis is still unclear. Established developers such as Adarsh, Chaitanya, Prestige and Total Environment built lavish lifestyle villas in this area, which offers the serenity and space that Bangalore’s wealthy look for in luxury homes.
The price tags for most of these villas range from Rs. 3 crore to upward of Rs. 30 crore. Examining the per-square-foot rate in light of these figures is not a realistic way of benchmarking the pricing, as it is difficult to put a price to the benefits of dedicated land and the open spaces available in these developments. Nevertheless, the actual figure often comes in at less than Rs. 10,000/sq.ft.
Reasonable prices for luxury homes of excellent construction quality in posh localities reflect a long-standing market reality in Bangalore – it has always been driven largely by genuine end users. Real estate prices in this city have never surpassed logic. In fact, the high development quality seen in Bangalore’s real estate projects is not limited to top-notch
developers, but extends to most of the ones active in this market. The residents of this city do not accept substandard products, and have always valued the high levels of quality that are not available in most other cities.
This is not to say that Bangalore is entirely devoid of investor activity. We see a lot of it reflected in the prices escalations in North Bangalore, specifically in areas like Hebbal and Yelahanka, where the action is high. However, considering the predominantly healthy market characteristics and the superior offerings involved, these areas and their adjacent locations are still reasonably priced, offer a generous lifestyle and rank very high in capital value appreciation.
In 2014, Bangalore city witnessed the launch of around 35 luxury residential projects offering around 6000 units, as compared to 18 projects offering a total of 4200 units in 2013. During 2012, the market saw the launch of 17 such projects with 3800 units. The trend was quite different in 2010-‘11 – in 2010, the market saw the launch of 950 units from eight projects and in 2011, 11 projects offering 1350 units were launched.
Bangalore Luxury Housing Hotspots:
- Palace Road
- Lalbaugh Road
- Frazer Town
- Thanisandra Road
Accent on Luxury Facilities: In recent times, most buyers have been seeking quality products, and this is compelling developers to come up with luxury projects in conjunction with global property developers and architects. To attract buyers, developers are now trying out a variety of new products in the luxury housing segment, including Singapore-and US-style apartments, homes that are similar to plush hotels and branded luxury residences.
Developers are also increasingly adding exceptional facilities including golf greens, schools, independent swimming pools, shopping centers, indoor arenas, piped gas, meeting rooms, concierge desks, gymnasiums and similar lifestyle accoutrements. Spacious luxury apartments also invariably include top-quality interiors, bathroom fittings and kitchen decor, often using imported materials. Thus, the desirability index of upcoming projects depends significantly on their lifestyle offerings and exclusivity.
Indicative Price Range For Luxury Housing In Bangalore:
Central Bangalore – Rs. 16,000 to 36,000/sq.ft.
North Bangalore – Rs. 7,000 to 14,000/sq.ft.
South Bangalore – Rs. 7,000-12,000/sq.ft.
East Bangalore – Rs. 7,000 to 12,000/sq.ft.
West Bangalore – Rs. 6,500 to 10,000/sq.ft.
Indian developers have not been fazed by the challenge that the deeper socio-economic connotations of what constitutes luxury poses to their new offerings, and have come out with concepts to seek to defy the ‘premium location’ logic. The success with which their efforts have been greeted varies, depending largely on how imaginatively they have been able to bring out the concept of modern luxury in new locations.
It stands to reason that the country’s most prominent residential locations cannot yield many more options for those who look for the highest status value in their homes. However, these buyers will continue to seek specific social environments that developers will have to provide in every new location and project.
· Business Standard
· Silicon India
· Economic Times
· Jones Lang LaSalle