“Was the area affected by the recent floods?,” is a question all property sellers, consultants and brokers in Bengaluru will have to respond to following heavy rains and flooding in some parts of the IT Capital.
In yet another reminder of periodic infrastructural challenges in Bengaluru, relentless rains in the city have led to severe waterlogging in various parts, including the Central Business District, and Sarjapur Road and HSR Layout along the Outer Ring Road, among others, once again inflicting hardships on office goers.
One of the most disturbing of such episodes in the city’s recent history occurred in 2022, when over 130 mm of rain in just 12 hours left the city submerged in knee-deep water for days on end. The following year, Bengaluru received 71.2 mm of rain, once again paralyzing several major roads in the city.
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However, data shows that property prices have seldom taken a hit in Bengaluru since 2022, due to issues of urban flooding. As per data sourced from Square Yards, the per square feet average property price in Yelahanka increased from ₹8,635 in Q3 2022 to ₹8,750 in the following quarter. It then jumped to ₹8,900 in Q3 2023 and further to ₹9,060 in Q3 2024.
Similarly, the average property price in Koramangala, an upscale residential and commercial area in Southeast Bengaluru, and also a flood-prone locality in the IT capital, recorded an increase of 10% between Q3 2022 and Q3 2024, to ₹19,150 per square feet from ₹17,422.
A similar trajectory was evident in the average rentals of a standard 1,000-square feet apartment in the two neighbourhoods.
Time and convenience versus short-term pain
“Typically, these kinds of flooding scenarios pop up 1, 2 or 3 days in a calendar year. So it is a short lived problem,” explained Shantanu Mazumder, Executive Director, Bengaluru, Knight Frank India. He further added that heavy rains do not impact the entire city uniformly, usually leading to difficulties in different pockets across the city year after year.
The IT corridor along the Outer Ring Road East was amongst the worst hit areas during the 2022 floods. However, demand for residential property has historically surpassed supply in this belt. Furthermore, with a metro line under construction, public transport connectivity is presently limited in this region. In fact, traffic congestion during peak hours along the ORR often makes it to local news headlines.
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The demand-supply dynamic in this belt has kept property prices on a growing trajectory, experts reason. In a tradeoff between long commute to work battling heavy traffic, versus occasional difficulties amid heavy rains, professionals often prioritise time and convenience, even at the cost of higher rents and property prices.
Statistically speaking, the average property price of each square feet on Sarjapur Road, which is prone to waterlogging every monsoon, stood at ₹8,635 in the June-September quarter of 2022. Cut to the third quarter in 2024, the price rose to ₹9,060, data from Square Yards showed.
Do instances of flooding force owners to sell their property?
Besides prospective buyers, floods also concern individuals who have invested or already own property in affected areas.
With respect to issues of waterlogging or floods in specific projects, as opposed to a locality-wide problem, property owners in different housing segments adopt distinctive measures. Furthermore, these issues largely crop up in older projects as developers in recent years have begun to leverage design and technology to avoid micro-level capacity failures, experts said.
“Property owners in the affordable segment usually live with the problem, because even if they want to rectify the problem or engage in some re-engineering, there is a cost involved. For them to put in that kind of cost, they would think twice,” Mazumder pointed out.
Others agreed. Manoj Agarwal, founder of Agarwal Estates, said that buying another property involves additional costs such as home interiors, registration and stamp duty charges, which is a deterrent for this segment of buyers.
Also Read: Bengaluru’s rains, traffic and water shortage add to blues; here’s how infrastructure challenges impact property prices
Meanwhile, property owners in the mid-segment attempt to find a solution over time. In the luxury segment however, the quickest turn around is observed to rectify underlying challenges, experts said.
They simultaneously highlighted that it is also the luxury segment where majority of the cases have been witnessed, particularly in villament projects, wherein owners consider selling off their properties due to challenges inflicted by heavy rains. However, given that aspirants in the luxury segment usually opt for new units, it takes a longer period to find a prospective buyer.
Generally, property owners do not compromise on the selling price, which is usually above the purchase price. They may, however, forego a part of the capital appreciation in order to dispose of the property, experts said.
