by THO
Housing prices in Bengaluru and Hyderabad have increased by more than 80% in some pockets since 2020 primarily on account of demand emanating from IT/ITeS professionals residing in these cities, a report by Anarock has said.
As per Anarock’s recent report, while Bengaluru’s Bagaluru recorded the highest price appreciation of 90% between 2019-end and June this year, residential prices in Whitefield, a techies’ hub, increased by almost 80% during the period. Sarjapur Road saw prices going up by 58%. Prices of properties in Hyderabad’s Kokapet, located close to the airport, went up by 89%, Bachupally by 57% and Tellapur by 53%, the report showed.
Demand for residential real estate in the southern cities of Bengaluru and Hyderabad is largely driven by the IT/ITeS professionals who were least impacted by the pandemic. Given that owning a home became a necessity for several millennials (who previously preferred renting over buying) during pandemic-like exigencies, demand suddenly shot up, according to an analysis by Anaorck.
“Many came forward to buy their own home amid various offers and discounts doled out by the developers in the initial phase of the pandemic. Later on, demand continued and even when prices saw a rise due to inflationary trends of the input costs, buyers remained undeterred. This resultantly also prompted developers to increase prices further as demand was high,” said Anuj Puri, chairman, Anarock.
Moreover, residential prices in these cities remained range-bound for many years just before the pandemic in 2020 because of the structural reforms like RERA, DeMo, GST and the IL&FS crisis. And now (post Covid) with demand going over the roof, the developers also saw it as an opportune time to increase prices. The price jump is mostly seen from 2022 onwards, he said.
In the last two years, demand in all these cities remained significantly high and hence developers also sought to increase their prices, something that was long overdue, said Puri.
This is how the prices stacked up
As per the data, the top 7 cities collectively saw over 44% of price appreciation in the last five years. At a city level, Hyderabad recorded the highest jump of 64% between 2019 and H1 2024, followed by Bengaluru with a 57% increase. The lowest price growth of 25% was seen in Kolkata. NCR and MMR both witnessed a 48% price appreciation each in this period, Anarock data showed.
Also Read: Hyderabad’s property registrations touch ₹12,000 crore in Q2 2024
The average residential prices at Bagaluru jumped by almost 90% from ₹4,300 per sq ft in 2019 to ₹8,151 per sq ft in H1 2024. Hyderabad’s Kokapet ranked second with 89% price appreciation. Prices rose from ₹4,750 per sq ft in 2019 to ₹9,000 per sq ft in H1 2024.
Bengaluru’s Whitefield was ranked third, with an 80% rise in residential prices during the period. Average prices increased to ₹8,600 per sq ft in H1 2024 from ₹4,765 per sq ft in 2019.
The outlook going forward
As things stand now, all signs currently favour the residential market in 2024 in these cities, and the year can create another peak in housing sales and new launches. Developers too continue to remain bullish about the housing demand in the upcoming quarters, particularly the premium and the luxury segments, the Anarock report showed.
Several large and listed developers have been on a land-buying spree across the cities in the first half of 2024 and most of their balance sheets are clean.
As data indicates, the major listed developers have a healthy pipeline of new launches in FY 2025 spanning over nearly 176 mn sq ft area with the highest of approximately 51 mn sq ft planned in Bengaluru alone, Anarock data showed.
