Why Bengaluru Real Estate Delivers Better Returns Than Other Indian Cities?

Bengaluru has become the strongest housing market of India over the last ten years. It has been showing impressive Bengaluru real estate growth rate and resilience. The city has attracted a mix of tech professionals, entrepreneurs, and families looking for a better quality of life. Real estate in Bengaluru is a leading option for investment. This is mainly due to its lively economy, rich culture and improved infrastructure.

Here we will look at what makes Bengaluru’s real estate market different from other cities in India.

Few Reasons Why Real Estate in Bengaluru Outperforms.

Here are the reasons why real estate market in Bengaluru is an exciting option for everyone:

1. Strong Increase in Property Values

The real estate boom in Bengaluru regularly makes it rank among the best cities for property value growth. It has the second-fastest price increase among major Indian cities.

• Property rates in Bengaluru have gone by about 57% in the previous five years. It is higher than the national average of 44%.
• Whitefield and Electronic City are a couple of areas where you can experience bigger increases. The prices are rising by 60-70% due to the growth of tech parks and an influx of skilled workers.

Apartment prices in Bengaluru are shot up by around 24% compared to the previous year in early 2024. This makes it top the price rise report among others. This Bengaluru real estate price trend proves the growing housing needs here, driven by economic development and a flourishing job market.

2. Highest Rental Yields in a Metro City

Bengaluru leads the way when it comes to rental yields. It is offering an average gross rental yield of about 4.2%. This makes it the top-performing city in India for rental income. It is outpacing other major cities like Mumbai and Delhi by around one percentage point.

The rental market is also growing quickly, while rents increased by 9-10% in the last quarter in Bengaluru properties. This rise is mainly due to more people returning to office work and a limited number of ready-to-move-in homes. Investors can expect strong cash flow from their rental properties as demand continues to exceed supply.

3. Fast Property Sales for Reducing Investment Risk

One of the great things about Bengaluru’s real estate market is how quickly properties sell. Homes in the city can be sold in just 13-18 months. It is even less than the national average of about 24 months. This faster turnover means that investors don’t have their money tied up for long.

This efficiency allows investors to sell their properties more easily if needed. It will also be reducing their exposure to market changes and improving their overall financial security.

4. Strong Demand

Bengaluru is home to 40% of the GCC workforce of India. It means there is a steady stream of high-paying renters and buyers. The job market in the city is not only strong but also varied. It covers fields like information technology, biotechnology, aerospace, and more.

This diversity not only increased the commercial property rates in Bengaluru but also helped to keep the demand for housing steady. It is true even when the economy faces challenges. The need for homes continues to grow as more office spaces are filled in Bengaluru. This ultimately is making it a reliable market for real estate investment.

5. Future-Ready Infrastructure Development

Bengaluru’s infrastructure is always improving. This is true with several major projects on the way. Developments like Namma Metro Phase 2A & 2B, the Peripheral Ring Road and a new airport terminal will create new neighborhoods. These will also shorten commute times.

Historically, new infrastructure has increased Bengaluru real estate rates by 10-15% along these new routes.

The state government is also focusing on building electric vehicles and aerospace hubs. It adds to the appeal of Bengaluru by creating new economic opportunities beyond just the IT sector.

What Does This Mean for Investors?

Investors and real estate buyers in Bengaluru can benefit from the growing market trends in multiple ways. These include;

Dual-Engine Returns: Capital and Cash Flow

Investing in Bengaluru offers a unique opportunity for returns through both capital appreciation (increased property value) and strong rental yields (income from renting). This means investors can earn money in multiple ways. This is making Bengaluru a better choice than places like Mumbai, which mainly focuses on property value, or Chennai, which emphasizes rental income.

Quick Stock Liquidation

Bengaluru’s fast property sales mean lower holding costs and less risk from market changes. Investors can easily sell their properties when needed, which helps them keep control over their investment portfolio.

A Stable and Tech-Led Market

Bengaluru’s real estate market benefits from a large number of tech professionals, which helps keep rental prices and resale values stable. This tech-driven demand provides a layer of stability that is often missing in other markets, where speculative buying can cause prices to fluctuate wildly.

Continuous Infrastructure Improvements

With builders in Bengaluru keeping new infrastructure projects happening every 3-5 years, investors can expect fresh opportunities, while property value increases along these new routes. This ongoing development keeps Bengaluru’s real estate market lively and profitable for the long term.

Quick-Fire Tips to Capture the Edge

• Invest near upcoming Metro Stations or Airport Rail Links. Top builders in Bengaluru are now developing properties close to new metro stations to offer a better connectivity and standard of living overall. Investing in such properties can increase value by 12-18% within two years.
• Focus on 2-BHK Units when considering properties in Electronic City. This area has a large pool of potential renters and offers competitive rental yields of around 5%. This will be making it a great choice for investors.
• Just like other developers in Bengaluru, add value with smart features, which include smart-home technologies and modular kitchens in your properties. These can increase rental income by 10-15%, especially in tech-heavy areas.
• Refinance when property rates drop. Taking advantage of lower EMI rates can boost your net yields by about 0.3%. It will also be giving you extra financial benefits.

Conclusion

Bengaluru’s real estate market offers great price increases, the highest rental yields in the country, and low inventory levels. With a growing tech and manufacturing job market and ongoing infrastructure improvements, the city is a smart choice for investment.

For those looking to benefit from Bengaluru’s growth, investing in apartments is a strategic and rewarding option. Working with trustworthy developers like Mudiita Developers can enhance your investment experience.  You can enjoy all the luxury amenities with our upcoming residential projects in Bengaluru named “Reflections,” that will match your financial goals and elevate your overall living experience.

Contact us for further details.

FAQs

Q: Why is Bengaluru considered a prime location for real estate investment? 

A: Bengaluru is recognized for its robust economy. It has a diverse job market and ongoing infrastructure development which makes it an attractive destination for investors.

Q: What returns can investors expect from Bengaluru’s real estate market? 

A: Investors can anticipate significant returns through both capital appreciation and rental income. It offers yields that outperform many other Indian cities.

Q: How does infrastructure development impact property values in Bengaluru? 

A: New infrastructure projects typically lead to increased property values. It does so by improving connectivity and accessibility, thereby enhancing demand.

Q: Is now a good time to invest in Bengaluru’s real estate market?

A: Yes, current market conditions coupled with future infrastructure developments make it an opportune time for investment in Bengaluru’s real estate sector.