Bengaluru home sales dip in Q1 2024 as affordable housing segment shrinks

Similarly, office leasing in the city remained unchanged at 3.5 million square feet (msf) in Q1 2024 compared to the same quarter a year ago.

Bengaluru housing sales dipped to 13,133 units in the first quarter of calendar year 2024, down 2 percent from the year-ago period following a sharp drop in the affordable housing segment, a report by real estate consultancy firm Knight Frank has said.

"This is majorly due to a dip in sales of below Rs 50-lakh housing segment that has declined by almost 68 percent in Q1. However, the Rs 50 lakh-Rs 1 crore segment has grown by 8 percent, while the sales in ticket sizes above Rs 1 crore have spiked the most," Vivek Rathi, head of research at Knight Frank India, said on April 4.

Bengaluru has been seeing housing sales flatten over the past few quarters and the ongoing water crisis in the tech city due  to unplanned development is making buyers revisit their plans.

The city saw another 2 percent dip in sales to 26,247 units in the first half of 2023. Overall the city saw a marginal increase in sales of 1 percent to 54,046 units in 2023, previous reports said.

As reported by Moneycontrol, investors who were considering buying a property in the city have decided to defer their investments as taps run dry in several parts, especially close to the IT corridors.

Office leasing in the city remained unchanged at 3.5 million square feet (msf) in the first quarter, similar to the year-ago period. In the second half of 2023, office leasing dipped 19 percent to 5.5 million square feet. Overall in 2023, the city witnessed a 14 percent drop in office space transactions.

Across the top 8 cities, Knight Frank India report said the share of sales in the units priced at Rs 50 lakh and below dipped 10 percent to 23,026 units from the year-ago period.

The combined impact of rising prices, higher home loan rates and the relatively adverse effects of the pandemic in this sector had persisted, suppressing demand.

The Rs 1 crore and above segment grew significantly by 40 percent in the first quarter from the year-ago period. Sales in the Rs 50 lakh to Rs 1 crore segment dropped of 6 percent, as homebuyers’ focus shifted to the higher-priced category.

The top eight cities are Bengaluru, Pune, Mumbai, Ahmedabad, Delhi-NCR, Chennai, Hyderabad, and Kolkata.

Mumbai tops the ranks 

Among  the eight cities, Mumbai had the highest sales and annual growth, with 23,743 units sold in the January-March period, 17 percent more than the previous year.

The surge was driven by a 259 percent rise in the sales of units priced above Rs 1 crore. Sales in Hyderabad grew 15 percent and 14 percent in in Pune during the quarter.

A total of 93,254 residential units were launched in the quarter in the eight cities, a growth of 7 percent from the year-ago quarter. Kolkata saw the highest launches, 89 percent more than the previous year, at a record 6,021 units.

Mumbai witnessed the highest growth in the affordable segment with a 13 percent growth at 10,527 units. Bengaluru (6,065), Mumbai (5,815), and Pune (5,399) together accounted for more than 60 percent of sales in the Rs 50 lakh-Rs 1 crore bracket.