Recovery seems to be on the cards for premium and larger homes in Bengaluru post pandemic since the preference of homebuyers has shifted. This is even more evident from our quarter-by-quarter analysis of 2021 which shows a consistent hike in demand for luxurious and bigger homes.
Bengaluru’s premium housing segment witnessed a significant surge in demand and the numbers went up colossally from Q1 to Q4, 2021. Though the pandemic-induced economic crunches and job insecurities had a dire impact on the real estate markets of multiple cities in the country, Bengaluru’s online property search trends for 2021 revealed a positive movement for luxurious homes. With the continuation of the work from home culture, a rise in inquiries for 3 BHK and above configuration homes and villas have been recorded in the city of Bengaluru.
Post pandemic, the preferences of homebuyers have shifted to a holistic lifestyle with both sustainability and well-being at the core. Moreover, previous real estate trends have shown the inclination of southern cities towards larger and independent homes. This was, however, before the apartment culture mushroomed in the south too. As per data with Square Yards research, the property search trends in 2021 indicated a gradual shift back to independent homes and larger configurations. This in turn reflected a growing demand for the premium homes segment in the city during 2021.
Further, with the RERA allowing an extension of six months for the completion of existing projects, there could be a dip in the supply of smaller and affordable homes. Since Bengaluru has limited 1 BHK and 2 BHK vacant homes and new launches are unlikely to be announced in the near future, people are considering the available premium accommodations.
Demand Trends for Different Residential Configurations in Bengaluru
Square Yards research did a Q-o-Q analysis to identify the search pattern of home buying in Bengaluru, and the data revealed that larger homes saw a rise in demand in 2021.
The above image clearly shows a gradual increase in the share of searches for larger configuration homes (3BHK and above) from Q1 to Q4, 2021. What was interesting to note was that more than 50 percent of the total searches in all quarters was tilted towards larger configurations reinforcing the growing need for spacious and upgraded homes post Covid.
Throughout the year, searches for 3BHK units maintained a consistent momentum hovering between 39-42 percent in each quarter. However, demand for 4BHK and larger configurations recorded a steady Q-o-Q rise reaching a figure of 22 percent in Q4, 2021, a growth of almost 100 percent from Q1.
While in Q1, 2021 the share of searches for 4BHK and larger configurations stood at 11 percent, it moved to 16 percent in Q2, and 17 percent in Q3 before reaching its peak of 22 percent at year end. The softening of home loan rates and the buoyancy of capital markets combined seem to have encouraged prospective home buyers to consider the premium housing segment. Subsequently, the reduction of the stamp duty in Karnataka in March 2021 further propelled people to go ahead and invest in luxurious homes.
Towards the third quarter of 2021, a slight decline in the prices of ready-to-move properties was noted which further pushed people to expand budgets slightly in favour of a more spacious home.
The above mentioned findings hint at a slight yet consistent shift towards the premium home segment in Bengaluru, a city where previously the highest recorded search percentages showed the inclination of people towards apartments or 1 BHK and 2 BHK homes.
Budget-wise Analysis of Bengaluru’s Residential Segment
| Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | |
| Ticket Category | % Share | % Share | % Share | % Share |
| <INR 30 Lakhs | 13% | 9% | 11% | 11% |
| INR 30-60 Lakhs | 37% | 31% | 29% | 21% |
| INR 60 – 100 Lakhs | 30% | 34% | 34% | 33% |
| INR 1-3 Crore | 17% | 23% | 22% | 31% |
| Above 3 Crore | 3% | 3% | 4% | 4% |
The recovery of the real estate sector in Bengaluru post the second wave of Covid was gradual but consistent. The Q-o-Q spike in the numbers of residential property searches in 2021 do indicate the scope for growth in the coming times. The analysis of search trends for different budget categories also confirmed the growing preference for larger and upgraded homes as properties priced above Rs 1 Crore clocked a healthy Q-o-Q increase. As per Square Yards data, properties in the budget category of Rs 60-100 Lakhs captured maximum share of searches across quarters except in Q1 where almost equal demand was noted for the Rs 30-60 Lakhs category too. However, as the year progressed the searches for premium homes pegged at Rs 1 Crore and above noted a significant improvement registering a growth of almost 75 percent in Q4 when compared to Q1, 2021.
This growth was more prominent for properties priced between Rs 1-3 Crore. The searches in the category jumped from 17 percent share in Q1, 2021 to a considerable 31 percent in Q4, 2021. This reiterated the fact that this demand is driven by the segment of home buyers who are aspiring to upgrade from their 2BHK to 3BHK or 3BHK to 4BHK homes in wake of the pandemic-induced needs for space.
While as a whole the residential demand in the city is still driven by the middle and upper-mid segment housing it is safe to assume a burgeoning growth for the premium segment in the coming months backed by the need for homes that offer amenities and facilities to suit the needs of a post-Covid era home buyer.
Top Searched Localities for Premium Homes in Bengaluru
Whitefield
Whitefield is amongst the notable luxurious localities of Bengaluru that is home to renowned IT companies, MNCs, International Tech Parks, etc. Whitefield attracts a steady housing demand because it is less crowded and is well connected to the other parts of the city. The residential landscape of this locality is inclusive of villas, independent floors, townhouses, and apartments of every configuration, which could be one of the reasons why people preferred this locality for buying premium houses in all four quarters of 2021.
Sarjapur Road
Sarjapur Road is located in the south-east part of the city and is home to major IT companies. SH-35, Hosur Road, and ORR are the major roads that are connected with this locality. Also, well developed social infrastructure makes it a preferred investment destination. As per Square Yards research, Sarjapur was one of the most preferred locations by homebuyers looking for 3BHK and larger configurations in 2021.
Indiranagar
In Bengaluru, Indiranagar is known to be a developed commercial and residential hotspot. As Indiranagar nestles on the east side of the city, it is connected to prominent societies. From accessibility to prime landmarks to excellent connectivity and well-constructed social infrastructure, this is one of the poshest localities of the city. This locality is the go-to residential favourite of homebuyers since it has remained the preference of the citizens in Q1, Q3, and Q4 of 2021.
JP Nagar
In the southern part of Bengaluru, JP Nagar is located in between the Kanakapura Road and Bannerghatta Road. Multiple landmark projects have led to JP Nagar rising to be the upmarket of both commercial and residential properties, which has made this locality reach the list of top-most searched localities for luxurious homes in Q2, Q3, and Q4 of 2021.
It is clear from the given data that the year 2021 has driven the sales of premium homes in Bengaluru but the question that remains unanswered is whether people will prefer larger and luxurious homes in the foreseeable future as well. As of now, we can only wait and watch as to how the future months will unfold for the city.
