Augmented sales, availability of ready-to-move housing stock and improved new launches revived Bangalore’s realty momentum in Q2 2018. 99acres.com performs a micro-analysis and tabs the realty pulse across the city.
Amidst southern metros, Bangalore emerged as the front-runner with maximum demand and supply of residential units in Jul-Sep 2018, followed by Hyderabad and Chennai.
According to Bangalore’s Insite report, unsold inventory in the city declined by 8,000 units, QoQ, and came down from 70,000 units in Apr-Jun 2018 to 62,000 units in Jul-Sep 2018. Following suit, new launches also reported an upswing with Grade A developers adding close to 6,000 residential units. On the contrary housing supply in Hyderabad and Chennai remained subdued. Only 1,500 new properties were launched in Hyderabad in Jul-Sep 2018, whereas, Chennai failed to report any changes in the current inventory stock. Factors such as delayed approvals and slow-paced Real Estate (Regulations and Development) Act 2016 (RERA) registrations led to curbed growth in both Hyderabad and Chennai.
The uplift in buyer sentiment
Across budget segments, properties priced below Rs 40 lakh remained the flavour of the season in Bangalore with maximum demand and supply being restricted to the renowned pockets of North, South and East zones of the city. Key micro-markets such as Kengeri, Yelahanka, and Hoskote remained popular amongst homebuyers for affordable homes owing to the improved availability of RERA-approved projects and ready-to-move housing units. Fear of delayed delivery continued to linger, keeping investments in under-construction units at bay.
Despite majority home buying demand inclining towards properties priced under Rs 40 lakh, sales remained tepid. Lack of awareness about RERA among the Lower Income Group (LIG) and Middle Income Group (MIG) buyers, led to subdued response towards budgeted residential units. Sale of homes pegged beyond Rs 40 lakh, however, picked up momentum.
Key factors backing the realty revival in Bangalore
Quaint ambience, quality lifestyle, presence of reputed education institutes, and proximity to commercial the hubs escorted realty growth in the micro-markets of Yelahanka, Hoskote and Kengeri. Rambo Chethan Dsouza, Proplinks Properties, Bangalore, shares that perforating start-up culture, and increased commercial activities created a positive impacted on the localities nearby. Micro-markets such as Hoskote, Kengeri and Yelahanka are easily accessible from the Central Business District (CBD) within one hour which makes these locales the most befitting destinations for homebuyers. Also, a multitude of housing options in the price category of Rs 40-60 lakh have magnetised demand. Close to 70 percent enquiries received in these areas are from the IT professionals aged between 35-40 years."
On the macro level, the gradually resolving land acquisition challenges for development projects such as Peripheral Ring Road (PRR) and Metrorail, and the introduction of single window clearance for building approvals recuperated the buying and developing sentiment in the city.
As of now, the instant approvals will be given only for 1,200 sq ft building plans. However, the State government will soon bring 2,400 sq ft plots under the fold of single window clearance mechanism. This will not only save time but reduce the overall inconvenience caused to the developer.
Moreover, though the increase in the Guidance value by 10-30 percent irked buyer community, it propelled homebuyers to close housing deals before it was implemented from October onwards. Guidance value is the price at which properties are registered. It is the value fixed by the State authority and is a major source of revenue for the government.
Apart from the capital market, the rental landscape also showcased steady growth on account of expanding commercial activity and improving metro connectivity. Whitefield, Yelahanka, Bellandur, Ramamurthy Nagar and Kaggadasapura witnessed the maximum hike in the average rental values between 6-8 percent YoY.
Overall, Bangalore’s realty sentiment remained upbeat, and a similar trend is likely to prevail in the ensuing festive season. The year 2018 is expected to close on a high note with increased traction both from mid-income and elite homebuyers.
*99acres Bangalore Insite Report Jul-Sep 2018
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. 99acres does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.