India’s real estate sector is witnessing unprecedented growth, particularly in its major tech cities, Bengaluru and Hyderabad. These cities have seen property prices skyrocket by over 80%, largely driven by the IT and ITeS sectors. According to Anarock’s latest report, the southern real estate hubs have become magnets for both investors and homebuyers due to their thriving tech ecosystems, seamless connectivity, and rapidly evolving infrastructure.
Property Prices Surge: Unprecedented Growth in Key Localities:
Bengaluru’s residential market has experienced exceptional growth, with Bagaluru recording an astonishing 90% increase in property prices from the end of 2019 to mid-2024. Similarly, Whitefield, another prominent tech hub in the city, saw prices rise by almost 80%. Sarjapur Road, another highly sought-after location, recorded a 58% jump in prices.
Hyderabad has followed a similar trajectory, with property prices in Kokapet — an area close to the city’s airport — increasing by 89% during the same period. Bachupally witnessed a price rise of 57%, and Tellapur saw a surge of 53%, reflecting the city’s growing stature as a real estate hotspot.
These price increases reflect the growing demand for residential properties in both Bengaluru and Hyderabad, with IT professionals being the primary drivers of this surge. The steady influx of millennials, who previously preferred renting but now seek homeownership, further accelerates this trend.
Factors Driving the Boom in Bengaluru and Hyderabad Real Estate:
IT/ITeS Dominance: Tech Cities India’s Real Estate Boom Bengaluru and Hyderabad are globally recognized as IT hubs, housing the largest tech companies and a thriving startup ecosystem. The high demand for homes among IT professionals ensures consistent growth in these cities’ real estate markets.
Pandemic-Induced Shift: The COVID-19 pandemic shifted many professionals’ preferences from renting to buying. With more companies allowing permanent work-from-home or hybrid setups, many families sought larger homes and more permanent living solutions, especially in cities with better infrastructure.
Post-Pandemic Demand: As the pandemic subsided, the demand for homes did not slow. In fact, developers have continued to see high demand for new launches, especially in premium and luxury segments, despite rising prices due to inflationary pressures on input costs.
Millennials Enter the Market: The pandemic changed the mindset of many millennials, prompting them to become homeowners rather than renters. This demographic has played a pivotal role in boosting residential real estate demand in both cities.
The Role of Developers in Driving Growth:
Several large developers have recognized the opportunity in Bengaluru and Hyderabad and have gone on land-buying sprees across the cities in the first half of 2024. They have continued launching new residential projects, with Bengaluru alone expected to witness nearly 51 million square feet of new developments in FY 2025. Hyderabad is also set to see a significant number of launches as the city’s real estate market shows no signs of slowing down.
Anarock data indicates that across the top seven cities, there was a collective price appreciation of 44% over the past five years, with Hyderabad leading the pack at 64% and Bengaluru at 57%. Developers are bullish about the demand forecast for the upcoming quarters, expecting the boom to continue in 2024.
What’s Next for Bengaluru and Hyderabad’s Real Estate?
The future for real estate in Bengaluru and Hyderabad is brighter than ever. The IT-driven demand continues to grow, and with high-profile developments in infrastructure, such as metro extensions and new road networks, property prices in these cities are expected to rise further.
As the year progresses, the premium and luxury segments are anticipated to dominate the market, with several new launches catering to high-end buyers. With clean balance sheets, major developers are in prime position to fuel the next wave of real estate expansion.
Conclusion:
With property prices appreciating by over 80%, Bengaluru and Hyderabad have firmly established themselves as India’s premier real estate destinations. For investors and homebuyers alike, 2024 presents an unparalleled opportunity to secure a piece of these thriving cities, where growth seems inevitable.
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