The real estate market in India’s IT hub Bengaluru has slowed down, a Reddit user claims, citing reasons such as layoffs, less hiring, boost of AI and ‘silent recession.’
The user highlighted that the Bengaluru real estate market majorly depends on the IT industry. Even though people from other professions are buying property, the numbers do not catch up to IT employees.
“The whole Bengaluru real estate boom has been riding on IT folks. But that engine is slowing down now. Yeah, politicians and startup folks buy property, but not in the numbers that IT employees did. Demand just isn’t the same (sic),” the user wrote.
Factors behind the slowdown of real estate
The Indian IT sector is currently strained, resulting in job cuts and fewer graduates being hired. Additionally, the demand for real estate has been impacted by less investment by NRIs, and senior employees who have already bought a property do not need a new one, according to the Reddit user.
“Freshers aren’t getting jobs. Seniors already have houses. So who’s left to buy? Fewer people going abroad for work, so NRI investment in housing is drying up,” the user said.
Another concern raised by the user was the growing presence of AI, which is expected to result in more layoffs.
“AI won’t create jobs like cloud did. Everyone’s hyped about AI, but it’s not going to create jobs here like cloud tech did. Most AI work in India is just wrappers and tools around models built elsewhere,” the user further added.
Hence, due to this slowdown in the industry, people are not investing in real estate.
“Hiring freezes, layoffs, no hikes — people are playing it safe. Some might even default on home loans,” the post read.
Social media users agree
Netizens have reacted to the post by highlighting concerns about Bengaluru’s real estate market.
One of the users commented, “Yeah, Bangalore is in for a rude awakening. And this isn’t limited to the IT slowdown. Water has dried up, weather is not the same any more. The ones paying exorbitant prices to buy real estate are going to be bag holders a decade from now. Even if an IT downturn is not imminent, the water and crop quality, clogged roads are enough incentive to not buy matchboxes here.”
A user agreed on the growing loan defaults and wrote, “As an active trader, I also see defaults rising in India, and interest rates would go much much higher. Most people would not be able to qualify for these high priced mortgages leading to price reductions and even liquidations of highly levered builders. Easy money period is over, donno if the general public has come to terms with it yet.”
“My biggest fear is, AI will slowly eradicate the segment of Indian upper middle class created by IT. Diminishing middle class and all the jobs that is created to support that. 7% of Indian GDP,” added another.
