Demolition drive alarms potential property buyers in Bengaluru

Some have delayed their plans to buy property
Last Updated : 26 September 2022, 15:19 IST

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Amrita Jain was crystal clear about what she wanted while looking for a new home in Bengaluru.

The Karnataka High Court lawyer, who moved to the city from Dimapur in Nagaland, wanted a house that was well-connected by public transport, located close to schools and hospitals, and made by a builder she could trust.

Things changed when the city’s civic body Bruhat Bengaluru Mahanagara Palike (BBMP) initiated a demolition drive this month in a bid to tackle encroachment, just days after rain-triggered floods wreaked havoc in the city.

"My husband and I are… looking to buy our dream home. But reality is hard-hitting," said Jain, who has since reworked her priorities.

“Earlier the criteria in zeroing down on an area for relocating were transport connectivity, office hours, proximity to schools and hospitals, and experience of the builder. But now my list has expanded to include encroachment-related issues as top priority,” she said. Jain is not alone.

Many potential property buyers in India and abroad have been alarmed by the anti-encroachment drive in Bengaluru. Some have delayed their plans to buy property. Many others are pushing for more due diligence and shunning parts of the city such as Yemalur, Bellandur, Marathalli, Sarjapur, BEML Layout, Whitefield and the Outer Ring Road that were severely affected by the floods and targeted by BBMP for encroachments, property consultants told DH.

“Most buyers looking for a house in these areas would either need a bigger assurance or might transfer their preference to other parts of the city that were less or not affected by the floods,” said Rohan Sharma, the research head at property consultancy JLL.

Hesitancy can also be seen in the resale market because people are more cautious about properties that came before the RERA Act was implemented in 2016, said Prashant Thankur, the research head at property consultancy ANAROCK.


“Such developments are an alarming concern for us as NRI buyers,” Dubai-based Saurabh Kumar, who is the manager of Faith international General Trading, said. “Moreover, I’m also now convinced about investing with reputed developers rather than local developers so that we don’t end up with similar situations.”

A proptech startup has “seen a spike of almost 150% in enquiries” by its NRI clientele since the demolition drive began, it told DH on condition of anonymity.


In fact, things have become so serious that property developers in “India’s Silicon Valley” have started taking unusual steps to reassure potential clients.

“In addition to making sure that all the relevant documents are in place, we now carry out site visits and look at the BBMP’s masterplan to strengthen due diligence on our end. We also encourage our clients to verify facts from their end,” Thakur said.

Bengaluru has traditionally been amongst the top three preferred destinations for real estate investment in India. The city witnessed a rise in demand for property yet again after the pandemic, especially from NRI buyers after the rupee fell.

Demand for rental properties had also climbed in recent times as professionals made their way back to offices, said Bhavesh Kothari, the founder of Property First Realty LLP.

But things might change if property developers fail to assuage buyer concerns.

“Ramifications of the demolition drive might be felt across six months and that too throughout the country,” said Debarpita Roy, Research Fellow at Center for Social and Economic Progress.

Knight Frank, Brigade Group and the Karnataka government declined comment.

Legal experts such as Ankita Paul urged prospective buyers to pay more attention to details such as title rights, mandatory clearances, RERA certification and developers’ prior litigation battles.

Fellow lawyer Jain agreed, but was not ready to give up on the city.

“I have never considered a plan B because I am determined to settle in Bengaluru for the rest of my life. However, I am willing to run an extra mile to ensure that I invest in the right place,” she said.

Published 26 September 2022, 15:19 IST

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