Bengaluru's Housing Market: Rising Prices and Shrinking Affordable Supply
Bengaluru house prices rose by 5.3% annually over the last five years, but the supply is lowest for homes priced between Rs 30L and Rs 50L; What does it mean for homebuyers?
The Economic TimesImage: The Economic Times
Bengaluru, India, has seen a 5.33% annual increase in house prices over the last five years, with a notable shortage of affordable homes priced between ₹30 lakh and ₹50 lakh. The demand is shifting towards premium housing, which could impact homebuyers seeking budget-friendly options.
- 01Bengaluru's house prices grew by 5.33% annually over five years.
- 02Significant shortage in affordable housing, particularly in the ₹30 lakh to ₹50 lakh range.
- 03Demand is concentrated in premium housing segments, especially for 3BHK units.
- 04The ₹1 crore to ₹1.5 crore segment has the highest sales and unsold inventory.
- 05Predictions suggest a shift towards mid-priced homes in the future.
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Bengaluru, India, has experienced a 5.33% compound annual growth rate (CAGR) in house prices over the past five years, according to a report by Liases Foras, an independent real estate research company. The report indicates that prices are expected to appreciate by 7.2% in 2025, fueled by strong job creation, real estate demand, and infrastructure development. However, there is a concerning trend where builders are focusing on constructing premium 3BHK apartments in the ₹1 crore to ₹2 crore price range, leading to a significant shortage of affordable housing options. Only 335 new 1BHK units were supplied in the under ₹30 lakh category, and none in the 2BHK ₹30 lakh to ₹50 lakh category. Meanwhile, 22,174 new 3BHK units were added in the ₹1 crore to ₹2 crore segment. Vishal Bhargava, founder of BHK Voice, notes that while affordable homes often require compromises, there is hope for a resurgence in mid-priced homes. The report shows that the ₹1 crore to ₹1.5 crore segment has the highest sales at 17,606 units, indicating strong demand in premium categories, but also the highest unsold inventory of 21,028 units. This reflects a potential oversupply in high-value residential segments, which could impact future pricing and availability for homebuyers.
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The shortage of affordable housing could make it increasingly difficult for average homebuyers in Bengaluru to find suitable housing options, forcing them to consider higher-priced units or compromise on their requirements.
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