Bangalore witnessed multiple new residential launches in the first quarter of 2018, as reported by 99acres Insite Report. Improved demand and supply was recorded for RERA-compliant projects offering timely completion and security of investment.
Bangalore’s real estate market seems to emerging from the shadows casted by demonetisation, Real Estate (Regulation and Development) Act [RERA] and Goods and Services Tax (GST). After an elongated lull, developers in the Silicon City of India have started resurfacing with new project launches. The city reported a launch of nearly 20 new residential projects in the first quarter of 2018. This is in contrast to the meagre numbers reported in 2017, as per 99acres Insite Report (Jan-Mar 2018). Buyers, too, seemed to be regaining confidence in the segment with several RERA-compliant projects entering the market.
The improved confidence of buyers in under-construction projects was reflected in the marginal spike of three percent in demand for the category, QoQ. Though the overall supply figures remained almost unchanged in Jan-Mar 2018, vis-à-vis Oct-Dec 2017, they are anticipated to head north with sellers attempting to offload their investments in the secondary market in the forthcoming quarters.
Starting with demonetisation in November 2016, the inception of RERA in May 2017 and GST in June 2017 cumulatively curbed new residential project launches across all metros. While the currency ban stripped developers of available funds, RERA imposed stringent compliances on them. The tightened noose towards a transparent business environment led them to adopt a cautious approach and focus on offloading the existing stock which would invite hefty penalties under the Real Estate Act. Delhi NCR and Mumbai were the worst hit, whereas, Bangalore and Pune remained slightly resilient to the impact owing to the abundance of end-users in the market.
After having exhausted nearly 20 percent of the piling stock*, developers were left with limited schemes to lure buyers to year old projects. With RERA-compliance becoming the new prerequisite for buyers, developers reemerged with the status which employed buyer’s trust. Vidhyadhar Naik, a city based real estate agent, from Bangalore Real Estate confirms the same and says, “The new projects come with RERA-compliance which acts as a marketing tool for developers. Since majority of these are located in highly popular locales driven by the IT population, they have reported healthy traction from the long-time fence-sitters. Conversion rate, too, has improved as buyers are more confident of purchasing a RERA-compliant property which offers a promise of timely delivery and unbiased legal-intervention, if required.”
Some of the prime developers who have entered the market with new projects in Jan-Mar 2018 include Purvankara, Salarpuria Sattva and Prestige Group amongst others. The trend is expected to fuel further in the ensuing quarters with developers getting accustomed to the increased compliance under RERA and buyers coming to terms with GST liability on under-construction projects.
Source*: ANAROCK Research
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.