Need for Speed: How traffic is changing homebuyers' choices in Bengaluru

“I have to cross the busy stretch every time I go to see my relatives or friends. It became so difficult for me that I stopped driving and now take a cab. So much so that I finally decided to move out,” Rao said.

Poor planning, infrastructure

An elderly NRI couple considering buying a property near Sarjapura Road dropped their plans after experiencing the severe traffic snarls in the area.
“We even decided to sell our luxury apartment, which costs more than Rs 3 crore, at a large gated community near Hennur,” they said.

After the IT boom in early 2000, Bengaluru exploded with the influx of migrants. Experts said this, coupled with inadequate infrastructure and poor city planning, crippled mobility in the city.

Bengaluru was ranked No. 2 last year in the TomTom Traffic Index, which measures 390 cities across 56 countries by travel time, fuel costs and carbon dioxide emissions.

According to the index, the average travel time taken to cover 10 km in Bengaluru was 29 minutes and 10 seconds, an increase of 40 seconds from 2021. The average speed during rush hour was 18 kmph.

The traffic woes have started influencing choices being made in the city's real estate sector, depreciating property capital values near the most congested bottlenecks. Additionally, most buildings are being redeveloped as commercial establishments with residential settlements moving into the by-lanes.

According to Knight Frank, 43,420 residential units were launched across 221 projects in 2022.

Local brokers said that due to a shortage of land in prime locations and startup hubs such as HSR Layout, Indiranagar and Koramangala, most fresh launches have been in the suburbs including Hennur, Sarjapura, Kanakapura, and Devanahalli.

While residential land prices in prime areas continue to range from Rs 8,000 to Rs 10,000 per square foot (sq. ft), land prices in the suburbs have touched Rs 6,000 per sq. ft in Kanakapura, about Rs 3,500 per sq. ft in Hebbal, and Rs 5,000 per sq. ft in Kengeri. Almost all prices have jumped 10-15 percent from pre-pandemic levels.

“This means while the congested prime areas become more clogged, the suburbs are slowly picking up on the traffic, especially in Sarjapura and Hennur,” said Kiran Kumar, a realtor at Hanu Reddy Realty.

However, in traffic-prone areas like Silk Board, Madiwala, and Indiranagar, standalone residential apartments have taken the maximum hit.

"Bottlenecks like Silk Board have a major traffic hurdle and people don't want to be anywhere close to Silk Board. Standalone property prices have dipped by about 10-15 percent and are still dropping compared to the by-lanes away from traffic,” said Balaji Badrinath, a realtor at Coldwell Banker.

Younger crowds

With the traffic and growing connectivity, these places see a major commercial boom.

“To prevent the depreciation of assets, most homebuyers have started converting their apartments into paying guest accommodation or just renting them out as retail stores,” he said.

Brokers said extremely congested bottlenecks are attracting younger working crowds, while well-settled families are renting out their apartments in such areas and moving to the suburbs.

Ahona Ghosh, who frequently travels across Sarjapura Road, said, “One particular time, I remember driving past a woman walking on the pavement. After driving for three minutes through traffic, I saw her cross me again. And then again.”

Regular in-city travellers in Bengaluru prefer to stay close to their workplaces, often in well-connected junctions, to avoid the horrors of driving.

Deepika Das, a marketing professional who crosses the KR Puram bottleneck on her way to work, takes more than 50 minutes to reach her office 8.6 km away on bad traffic days.

“My colleague takes an-hour-and-a-half to reach, so I won't complain, but I already own an apartment, or I would have shifted closer to my workplace,” she added.

According to a survey of 420 people by the Moneycontrol team, about 49 percent of the respondents said they prefer to rent an apartment close to the workplace, even in a congested area. The rest said they would always choose to stay away from congested areas.

Reddy said the younger crowd prefers to stay close to well-connected junctions and so rental demand for apartments continues to be high despite traffic snarls.

“In places like Indiranagar and Hennur, rentals have jumped by more than 20 percent and will continue to rise, given that no fresh inventories are unavailable," he added.

Master Plan

Experts said most of the traffic snarls are due to poor implementation of the Revised Master Plan, coupled with a lack of proper town planning.

Sandeep Anirudhan, an environmentalist, said, “Despite new flyovers and bridges, the congestion continues on top of the flyovers as well as below. In the Revised Master Plan 2015, we see most of the zoning has been violated.”
Recently, the state government announced the drafting of RMP 2041 after the Karnataka High Court cited several violations in the RMP 2031.

"With the implementation of a proper master plan, it shifts people from the road to mass transit while decongesting the roads," Anirudhan added.
OP Agarwal, former CEO of WRI India, said this phenomenon exists not just in Bengaluru but everywhere.

"In Delhi, residential prices in a central area like Connaught Place are coming down and are cheaper than areas like Aerocity, which is further away. Most cities are becoming doughnut-shaped with the central part thinning out," he said.

Agarwal said with cars losing their status for the younger generation, the need is for more convenient mobility and living close to public transport facilities like a metro station is more important.

“More traffic increases real estate prices in the area. However, severe congestion will make it fall,” he added.

Ritesh Mehta, senior director and head of west and north, residential services and developer initiatives, at Jones Lang LaSalle, said with metros coming up across cities and the rapid infrastructure boom, there is a decentralisation of commercial and residential developments.

“Thus, apartments closer to commercial hubs and traffic do not command the same real estate value. In Mumbai, the commercial hubs were Nariman Point and Lower Parel. Before, the residential developments around the areas were expensive, but today, people have chosen to stay away to avoid traffic, leading to a depreciation of residential values here," he added.

Experts said the impact of traffic on real estate values mostly change in real time while people's choices evolve with time. Often, circumstances like the pandemic impact decisions, with a drive for a better and sustainable life.
For the others, staying close to the city centre and the happening hubs are more important at this stage of their lives.