A view of Bengaluru city.
Credit: DH Photo/ Pushkar V
Bengaluru: Residential prices in Bengaluru grew 10 per cent year-on-year (YoY) in the July-September quarter (Q3 2024), witnessing the sharpest rise among eight biggest Indian cities as focus increasingly shifted towards premium homes, according to a report.
The tech hub also led in the Rs 1 crore-plus segment, with a 95 per cent growth from Q3 2023, said property consultancy Knight Frank India on Thursday. This segment led the overall housing market, constituting 46 per cent of all sales and growing 41 per cent YoY, with 40,328 units sold in Q3 2024.
However, Knight Frank did warn that housing sales being driven by the luxury or premium segments is not sustainable in the long run, and that affordable housing needs to revive.
"Just the luxury end of the market will not be able to sustain the real estate industry, the mid-to-lower end also has to bounce back, which will happen," said Gulam Zia, Senior Executive Director at Knight Frank. "The bottleneck is the demand itself, because it is not infinite. At some stage, we will have to look at saturation or flattening of that."
In Q3 2024, home sales grew by 5 per cent YoY to 87,108 units across the top eight residential markets, the highest quarterly sales in the year. Total residential sales were 9 per cent higher in year-to-date terms. Delhi-NCR was the only market to record a de-growth of 7 per cent in sales in Q3 2024.
Sales in the mid-segment (Rs 50 lakh-1 crore) witnessed a drop by 13 per cent YoY in Q3 2024, with a corresponding decline in new launches. The share of sales in the affordable segment (Rs 50 lakh and below) declined by 14 per cent.
While rising prices have kept homebuyers away from the market in this price sensitive segment, the lack of supply as well as the interest rate have played a role in curtailing sales volumes, said Knight Frank in the report.
Bengaluru also led the quarter in office space, recording the highest volume of transactions for Q3 2024 at 5.3 million square feet (msf), an increase of 158 per cent from the year-ago period. This constituted 28 per cent of the office volume transactions across eight cities in the country, as per the report.
Office space transactions across the top eight cities reached 19 msf, the highest quarterly absorption since Q1 2018.
This marks an 18 per cent YoY increase from 16.1 msf in Q3 2023. Global Capability Centres (GCCs) accounted for 37 per cent share of office transactions in Q3. As much as 47 per cent of GCC transactions were concentrated in Bengaluru, mostly on Marathahalli-Sarjapur Road and Electronic City Phase 1.