Gurgaon: Water Crisis on Real Estate According to a report by Knight Frank, the housing segment priced at less than ₹50 lakh witnessed a significant decline in sales, ranging from 65% to 70% during the first quarter of 2024. This decline contributed to an overall reduction in housing sales in Bengaluru, which dipped by 2% to 13,133 units compared to 13,390 units in the previous year. Despite this, office demand in the IT city remained steady at 3.5 million square feet.
Vivek Rathi, the head of research at Knight Frank India, highlighted that the decline in sales in the affordable housing segment was primarily due to affordability challenges faced by buyers. However, sales in the residential segment priced above ₹1 crore saw a significant increase of almost 50%, indicating a divergent trend in the market.
When asked about the impact of Bengaluru’s water crisis on the real estate market, Shishir Baijal, chairman and managing director of Knight Frank India, stated that while the water crisis has not significantly affected housing sales, it remains a crucial issue to address due to Bengaluru’s importance as a commercial market.
Here’s how the housing sales numbers unfolded in Bengaluru during Q1 2024:
- Total residential sales volume: 13,133 units
- Total residential units launched: 13,135 units, showing a 9% year-on-year growth
- Average weighted residential price: ₹6,145 per square foot, with a 9% year-on-year increase
In the less than ₹50 lakh category, 993 units were sold, marking a 68% decline. In the ₹50 lakh to ₹1 crore category, 6,065 units were sold, indicating a 7% decline. However, in the ₹1 crore plus category, 6,075 units were sold, representing a 50% increase in sales.
In terms of office space transactions, Bengaluru recorded 3.5 million square feet in Q1 2024, constituting 22% of the total transactions across eight leading Indian cities. Office completions in Bengaluru grew significantly by 275% to 5 million square feet compared to Q1 2023. The major leasing activity was driven by Global Capability Centres, accounting for 51% of the total leasing activity in the city during Q1 2024. Flex office areas accounted for 26% of the leasing activity, followed by India-facing business and Third-Party IT Services at 14% and 9% respectively.
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