Better buy than rent: Bengaluru sees mindset shift of Gen Z towards properties as rental prices rise. Read more
Better buy than rent: Bengaluru sees mindset shift of Gen Z towards properties as rental prices rise. Read more
In recent times, rental prices in Bangalore have experienced a dramatic increase, accompanied by rising property purchase costs. However, recent statistics indicate that, despite these elevated prices, individuals are increasingly opting to purchase homes rather than continue paying substantial rents.
According to real estate brokers, the interest in home ownership has surged by approximately 35 to 40% among Generation Z in the city, based on a comparison with data from the previous year.
The escalating rental rates in Bengaluru have significantly influenced home buying trends, resulting in a notable decrease in the median age of first-time home-buyers from 42 to 34 over the last three years.
In some of Bengaluru’s most sought-after neighborhoods, rental expenses have soared by 45-50% in the past three years. Currently, prospective tenants can expect to pay between Rs 50,000 and Rs 65,000 monthly for a two-bedroom apartment in a desirable location, while three-bedroom units can reach as high as Rs 80,000.
Insights from a report by NoBroker, an online property listing service, reveal that in the first half of 2024, millennials and Generation Z made up more than 60% of property transactions on their platform in Bengaluru.
Sunil Singh, director at Realty Corp, noted, “We’ve successfully closed numerous deals ranging from Rs 1-2 crore, primarily involving buyers aged 28 to 40. Recently, we sold apartments in Bellandur and Indiranagar for over Rs 1 crore each, as tenants opted to purchase rather than continue paying high rents. Most young buyers are either seeking ready-to-move-in properties or are open to waiting for new listings that are less than six months old. In Bengaluru, many are inclined to invest under Rs 1 crore in 1 BHK units due to their rental potential. For end-users, the ideal price range is between Rs 1 crore and Rs 1.5 crore in sought-after neighborhoods like Indiranagar, Koramangala, and Whitefield.”
The increase in income levels has further propelled the home-buying trend. The Karnataka Economic Survey 2023-24 indicates that the state’s per-capita income rose by 5.8 percent from 2022 to 2023. Additionally, salaries in Bengaluru have seen a notable rise following the pandemic.
Attractive rental yields are also drawing young home buyers into the market. In Bengaluru, rental returns in the eastern IT corridor of Whitefield have surged to between 4 and 5 percent.
