Bangalore and Pune inch towards realty revival

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Bangalore

The quarter ending December 2018 showcased a gradual resurgence in the real estate markets of Bangalore and Pune. With large-scale consolidations, increasing demand, and reducing unsold inventory, realty sentiment in both the cities improved and recorded 1-2 percent growth in their average property prices.

The noted IT hubs of the country, Pune and Bangalore remained the cynosure of realty investment in Oct-Dec 2018. Backed by the effective implementation of Karnataka and Maharashtra RERA, infrastructure developments and commercial expansion, buying sentiment in both metros remained upbeat, resulting in 1-2 percent growth in their average property prices, QoQ.

One of the strong testimonies to the improving realty momentum has been the depleting unsold inventory level. Industry reports claim that while Bangalore currently has an all-time low unsold inventory of 17 months, real estate stock in Pune will take around 18-20 months to be consumed or sold from the earlier 25 months in December 2017.

Demand-supply mismatch also showed an ebbing trend. In Pune, demand and supply of ready-to-move apartments remained equipoised in Oct-Dec 2018 when compared to the preceding quarter. Alike, the Bangalore also captured a similar trend. From earlier six percent in Q3, 2018, the disparity in the popularity and availability of ready-to-move units reduced to five percent in Q4, 2018

Let’s delve into the key factors that worked in favour of realty revival in both the cities.

Bangalore

The second most active RERA body, the Karnataka RERA played a significant role in improving Bangalore’s realty sentiment. Of total 2,300 projects registered under Karnataka RERA, approximately, 70 percent, i.e. 1,421 are registered in Bangalore. The development has not only boosted the homebuyers’ confidence but also provided ample residential choices.

Popular micro-markets

Across zones, North and South recorded maximum enquiries and translations. Affordability coupled with ribbon development along the Outer Ring Road (ORR) and Sarjapur Road drove the housing demand in the realty pockets of Sahakara Nagar in the North and JP Nagar, Banashankari, Begur, Jayanagar, Gottigere in the South, resulting in 2-5 percent growth in their average weighted capital prices, QoQ.

Popular Localities

Average Capital ‘Asks’ (per sq ft)

Price Movement, QoQ

Sahakara Nagar

Rs 6,200

5%

JP Nagar

Rs 5,400

4%

Jayanagar

Rs 10,900

4%

Marathahalli

Rs 6,300

3%

Uttarahalli

Rs 4,550

2%

Source: 99acres Bangalore Insite Report Oct-Dec 2018

The emergence of new peripheries

The burgeoning popularity of southern Bangalore pushed the city realms further and led to the emergence of new residential pockets such as Marathahalli and Uttarahalli. While Marathahalli remained a popular choice of homebuyers on account of increased proximity to commercial hubs of Whitefield, Sarjapur Road, Electronic City and Outer Ring Road (ORR), Uttarahalli garnered traction owing to improved connectivity via Namma metro.

Taking note of the rising popularity, the average weighted capital prices in Marathahalli and Uttarahalli recorded a three percent and two percent hike QOQ, respectively.

Pune

With Maharashtra being the first state to implement RERA, western cities such as Mumbai and Pune remained substantially benefitted. While the swift transition to the new realty framework ensured stability in Mumbai’s residential landscape, Pune reported a revival with one percent growth in the average capital values QoQ. Factors that emerged as key benefactors for Pune housing market include:

Ample RERA-registered projects

The registration of over 5000 under-construction projects under RERA imbued homebuyers with confidence and activated realty momentum across the city. Though ready-to-move units remained the most sought-after, limited supply in the category shifted prospective homebuyers’ interests towards under-construction properties. Besides, marketing tactics by developers such as No-EMI till possession and packaged selling further helped in building traction in the latter segment.

Popular Localities

Average Capital ‘Asks’ (per sq ft)

Price Movements QoQ

Phursungi

Rs 4,500

3%

Akurdi

Rs 6,200

3%

Kalewadi

Rs 6,200

3%

Kharadi

Rs 6,980

3%

Handewadi

Rs 4,960

3%

Source 99acres Pune Insite Report Oct-Dec 2018

State initiatives under PMAY help the market grow

In a bid to meet the soaring demand for affordable housing, the civic bodies in Pune and Pimpri-Chinchwad regions announced the development of around 35,000 residential units by 2022. Some of the key areas that are likely to witness the growth of affordable units include, Kharadi, Hadapsar, Vadgaon, Charholi and Ravet. The Maharashtra State Road Development Corporation (MSRDC) also proposed the construction of 16,000 affordable homes along Mumbai-Pune expressway. Overall, the governments’ participation in the schemes further magnetised homebuyers’ interests and improved market sentiment.

City expands to offer more budget inventory

"Infrastructure developments such as ongoing metro project and a growing emphasis on affordable housing projects opened up new avenues in the city peripheries such Dehu, Dhayari, Kanhe and Manjiri. With average weighted capital prices pegged between Rs 3000 per sq ft and 4000 per sq ft, these areas captured maximum demand for 1BHK configurations", shares Gazanfar Siddiqui, Associate Vice President, Sales, 99acres

Increase in office space supply

As per the report, the office space supply in Pune surged by 29 percent in 2018 vis-à-vis 2017, the second best across the top five cities including Bangalore, MMR, NCR and Hyderabad. Though the majority of new office spaces came in select micro-markets of Kharadi and Hinjewadi, areas such as Baner and Aundh also remained popular amidst corporate giants.

Altogether, growing employment opportunities, the rising number IT migrants, and befitting climatic conditions have increased home seekers’ proclivity towards Bangalore and Pune. Not only self-use properties but earlier receded NRI investors are also paving their back into the cities on the back of improved market sentiment and increased investment opportunities.

 


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.


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