The ongoing water crisis in Bengaluru has significantly affected the real estate landscape, particularly in the eastern IT corridor of Whitefield, according to local brokers.
Previously boasting a rental yield of 4 percent, Whitefield has now become less attractive to both prospective tenants and investors due to water scarcity issues. Most large apartment complexes in the eastern part of the city, reliant on borewell water, are grappling with water shortages. As a result, investors are shifting their focus to the north and central IT corridors.
For instance, a family considering investment in Whitefield has reconsidered their decision in light of the water crisis. Concerns about the sustainability of groundwater sources and the potential recurrence of water shortages have prompted them to explore investment opportunities in central Bengaluru, where piped water is still available.
The reliance on borewells in areas brought under the city limits in 2007 has exacerbated the water crisis, with falling water tables due to overuse. While the ongoing Cauvery Project Phase-5, set to be implemented by May 2024, promises some relief with daily water supply, concerns about the current situation persist.
In response to declining rentals and increasing maintenance costs due to dependence on private water tankers, tenants and homebuyers prioritize 24/7 piped water supply from the Cauvery river. As a result, areas with assured water supply like parts of central Bengaluru and northern neighborhoods such as Hennur and Hebbal are gaining popularity among renters and buyers.
Despite the backdrop of rising real estate prices, the exacerbation of the water crisis due to unplanned construction and infrastructure expansion has contributed to declining rents and increased dependency on private water sources. Consequently, ensuring access to reliable water supply has become a top priority for tenants and homebuyers in Bengaluru.
