Bengaluru water crisis: Property prices in Peenya, HSR Layout, Marathahalli to fall 15%, say experts

Bengaluru water crisis: As Bangalore grapples with a persistent water crisis, the city's real estate sector faces looming challenges, potentially leading to a correction in property prices. Experts predict a decline of 10-15 per cent in the most affected regions, particularly in the east and central parts of the city. This anticipated adjustment comes amidst growing concerns over water scarcity and its impact on property values.

Vishal Raheja, Founder & MD, InvestoXpert, highlights the major influence of water scarcity concerns on property prices, particularly in high-demand areas.

"Rental rates in high-demand areas of Bangalore have surged by 30-40 per cent over the past two years, driven by tech industry demand and pandemic-related changes in work patterns. However, we anticipate a 10-15 per cent decline in prices due to the water crisis, especially in the heavily affected regions like east and central Bangalore," Raheja told Republic Business.

Vulnerable vicinities alert

Gurmit Singh Arora, National President, Indian Plumbing Association, stressed the adverse effects of water scarcity on property transactions and growth rates in Bangalore. While concrete declines in prices have not been observed yet, persistent water issues threaten to slow down property demand and could lead to price surges in the future. Arora pointed out areas such as HSR Layout, Marathahalli, Rajaji Nagar, and Peenya as potentially vulnerable to the impact of water scarcity on property values.

Anurag Goel, Director of Goel Ganga Developments, sheds light on the broader implications of water scarcity on real estate prices across favoured localities of Bangalore. With groundwater reserves depleting and rainfall patterns becoming increasingly unpredictable, buyers prioritise water security, driving up the value of properties with efficient water management systems or access to alternative water sources.

"In neighbourhoods, especially those which are on the outskirts of Bangalore, the properties' values dropped due to related issues with water, which are very severe. Areas with a record of droughts, unsatisfactory infrastructures and unattractive rainwater collection plans have been neglected, the real estate market in those communities is falling drastically," Goel told Republic.

Depth of Bengaluru's water scarcity

Bengaluru is grappling with a severe water shortage, with a deficit of 500 million litres per day (MLD), according to Karnataka Chief Minister Siddaramaiah. The city's demand for drinking water and industrial use stands at 2,600 MLD, of which only 1,450 MLD is sourced from the Cauvery river, leading to a significant shortfall. Contributing to the crisis are dry borewells, with 6,900 out of 14,000 government borewells having dried up. 

The situation has been exacerbated by drought conditions and low rainfall, resulting in depleted reservoir levels and failed borewells. To address the issue, the government plans to augment water supply through various measures, including drilling new borewells and reviving existing ones. Additionally, efforts are underway to replenish dried-up lakes in Bengaluru using treated water from the Koramangala-Challaghatta valley to recharge groundwater.

Water saving technologies

Developers and real estate agents are under pressure to address consumer concerns and adapt pricing strategies accordingly. Experts have voiced their perspectives on tackling water scarcity concerns and its implications for the industry. 

Gurmit Singh Arora stressed the importance of developers providing accurate information to potential homebuyers, urging them to invest in technologies like rainwater harvesting, controlled toilet flushing, greywater recycling, and water-saving valves. He stressed the need for better sensors to regulate water wastage effectively.

Anurag Goel of Goel Ganga Developments, explained the efficacy of water conservation measures in reducing consumption and enhancing water quality within their building projects. At Ganga Osian Meadows Township, a comprehensive rainwater harvesting system covering over 50 acres of land was implemented, harnessing up to 200 million litres of rainwater annually for non-human consumption purposes. 

This initiative reduced the township's reliance on groundwater and municipal water supply by over 60 per cent. Similarly, at Ganga Orrion, a modern recycled water treatment plant was established, recycling nearly 400,000 litres of wastewater daily for non-drinking purposes like irrigation and cooling systems, according to Goel Ganga Developments.

Policy's crucial role

Experts shed light on the importance of government policies and regulations in mitigating the looming water crisis in India. Gurmit Singh Arora  highlighted the urgent need for concerted efforts to address water challenges, considering that India accounts for 18 per cent of the world's population but has access to only 4 per cent of the global water supply.

Arora stressed the necessity of comprehensive measures such as groundwater preservation, rainwater harvesting, and basin preservation to combat the escalating water scarcity. He highlighted the importance of collaborative endeavours involving government agencies, development bodies, NGOs, and local communities to effectively preserve water resources. Arora stressed the imperative for substantial investments in water preservation technologies to mitigate the crisis.

Policy proposals forward

Anurag Goel pointed out certain gaps and shortcomings in current regulations that hinder more widespread adoption of sustainable water management practices.

"Although there are certain guidelines and regulations in place that limit the overall implementation of improved water management techniques, there are some remaining shortcomings," said Goel. "Take for example, the cases where there are no stringent enforcement mechanisms, irregularities in handling regulatory affairs, by different territories, and you can imagine the level of uncertainties which makes it difficult for the companies to comply. 

On top of this, there are not even any comprehensive guidelines for new technologies, including greywater recycling systems that may hinder their adoption on a wide scale," he added.

To address these challenges and promote sustainable real estate development amidst the water crisis, Goel proposed several policy changes and incentives. These recommendations encompass the development of more stringent building codes mandating water conservation, providing financial incentives such as tax breaks and low-interest loans for retrofitting old buildings with water-efficient technologies, and fostering cross-disciplinary collaboration amongst government agencies, developers, and water management experts.