Bangalore Insite Report Apr-Jun 2016

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Bangalore Swot analysis apr-jun 2016

East and South Bangalore 

Capital analysis 

Residential Apartments Capital analysis East and South Bangalore Residential Apartment Apr-Jun 2016

  • The first half of 2016 marked the revival of the housing market in East and South Bangalore backed by an increased demand for affordable housing. Major beneficiaries of this upward capital movement were localities beyond Outer Ring Road (ORR).
  • The last two quarters saw a number of new launches, most of which were concentrated in areas such as Koramangala, Electronic City, HSR Layout, Jayanagar, JP Nagar and Bannerghatta in South Bangalore. In East Bangalore, Whitefield, Marathahalli, Old Airport Road, Old Madras Road, KR Puram, and Sarjapur Road continued attracting the developer community.
  • One of the key frontrunners, Sarjapur Road, posted a hike of 7% in average capital values due to demand from midsegment buyers working in IT hubs.

Residential Land

  • East and South Bangalore Residential Land Analysis Apr-Jun 2016In line with the general lack of activity in the realty market for residential plots, average prices of parcels in the city posted an artificial hike in ‘ask’ rates to the tune of two percent Q-o-Q.
  • Though improved connectivity and proximity to IT hubs helped residential land market in East and South Bangalore gain traction, enquiries hardly converted into transactions. Seasoned investors are not in the favour of parking their money in land due to limited buyer base.
  • Some pockets in South Bangalore that recorded a rise in average land rates included Chandapura and Rajankunte, clocking a hike of two and seven  percent, respectively.
  •  Sarjapur and Bagalur in East Bangalore gained traction on the back of direct accessibility to IT hubs such as Whitefield and Aerospace.

 

 Rental Analysis

 Residential Apartments 

  • East and South Bangalore Rental Apartments Analysis Apr-Jun 2016While rental demand for premium homes took a backseat in the first half of 2016, budget inventory witnessed an upswing. Average rental values in East and South Bangalore advanced by three percent Y-o-Y. Increased demand from IT catchments, fresh inventory supply in mid-budget segment and new commercial establishments pushed up the rental rates.
  • Indira Nagar and Old Airport Road in the East recorded maximum rental appreciation to the tune of 11% backed by the expansion of commercial centers.
  • Proximity to IT/ITeS hubs along the ORR coupled with the proposed metro connectivity led to a 4% rise in rental values in localities across Sarjapur Road.
  • Subramanyapura and Kanakapura Road registered an average rental growth of nine percent YoY.

Builder Floors

  • East and South Bangalore Rental Builder Floor Analysis Apr-Jun 2016The rental yield in the builder floor segment was at par with residential apartments, rising to the tune of three percent Y-o-Y. The tenant community preferred this residential format owing to its price competitiveness over apartments.
  • Hulimavu emerged as the top grosser with an eight percent hike in average rental values. Housing demand from IT workforce and easy accessibility to premium markets such as Electronic City, BTM Layout and Nice Road led to the rental buoyancy.
  • While the established localities such as Kalyani Nagar and TC Palaya faced restricted land availability, rental values soared on the back of high demand from working professionals and international student fraternity.
  • Kumaraswami Layout and Banashankari also posted a positive rental movement.

 

North, West and Central Bangalore 

Capital Analysis

Residential Apartments North, West and Central Bangalore capital analysis for residential apartments apr-jun 2016

  • Residential prices in Apr-Jun 2016 rose marginally by one percent each, in North and West Bangalore, while the established and more affluent Central Bangalore posted a decline of two percent, reeling under the pressure of saturated price levels and infrastructure woes.
  • As against the previous quarter, North and West Bangalore have undergone a revival in demand, which has resulted in an upward capital price movement. Competitive pricing, infrastructure upgrades and commercial expansion have overturned the realty landscape of these zones, positively.
  • Jakkur in North witnessed maximum quarterly capital appreciation to the tune of seven percent.

North, West and Central Bangalore capital analysis for residential land apr-jun 2016Residential Land 

  • Residential land values witnessed a marginal rise of a percent in Apr-Jun  2016, with North Bangalore garnering maximum traction. • Devanahalli and Anekal were the top performers in the quarter, witnessing  a growth of eight percent, each,  in the weighted capital values of residential plots.
  • Anekal’s land market topped the popularity charts on the back of rising demand from working professionals looking for second investment opportunity within Rs 30 lakh.
  • Nelamangala witnessed an average capital appreciation of four percent in land values owing to seamless connectivity to Tumkur Road, NH4 and North Karnataka. 

 

Rental Analysis

Residential Apartments

  • North, West and Central Bangalore rental analysis for residential apartments apr-jun 2016North, West and Central Bangalore posted a three percent hike in the average rental values Y-o-Y. These zones recorded a marked rise in demand due to proximity to IT hubs, new launches and infrastructure developments.
  • Malleshwaram scored the highest average rental yield, standing at nine percent Y-o-Y. The locality emerged as an alternate rental hub, attracting spill-off demand from its developed neighbourhoods of Vidhana Soudha, a political center.
  •  Thanisandra and Hebbal largely benefited from fresh inventory supply in the luxury segment and proximity to Manyata Tech Park was another growth driver.
  • Rental markets across Mysore Road and Jalahalli grew on the back of the proposed metro line.

 Builder Floors

  • North, West and Central Bangalore rental analysis for builder floors apr-jun 2016The rental market for builder floors in North and West Bangalore saw a marginal appreciation of a percent Y-o-Y. • Hegde Nagar in North clocked the maximum rental yield of nine percent owing to increased demand from working professionals of Manyata Tech Park.
  •  New launches in the premium housing segment in Hebbal and higher rental prices across the neighbouring localities attracted tenant community to Sahakara Nagar, resulting in an eight percent hike.
  • Localities such as R T Nagar and Basaveshwara Nagar along the IT/ITeS belt of ORR continued to be prominent rental hubs, recording a spike between two and three percent in Apr-Jun 2016.
  • Rental occupancy in Vidyaranpura increased owing to its popularity.

 

Demand and Supply Analysis

Bangalore’s realty illustrated a grim scenario on account of an enormous demand-supply mismatch. Despite a huge inventory overhang of around 80,000 units, the number of new launches increased by 13 percent in H1 2016, as compared to the first half of 2015. This has further put already stunted capital growth under pressure.  

Demand and supply analysis- By property type apr-jun 2016

 

By Property Type

  •  Residential apartments witnessed an enormous demand-supply mismatch, with supply exceeding demand by 40 percent. This indicates that a lot of unsold stock is yet to be absorbed.
  • Popularity and supply of residential land came second, followed by independent houses/villas. However, in the former property type, supply was short of demand by five percent.
  • West and North Bangalore house the maximum supply of residential land owing to easy availability.
  • The supply of independent houses/villas went up by two percent in Apr-Jun 2016 compared to the previous quarter.

Demand and supply analysis- By property type apr-jun 2016

 

By Budget

  • Demand and supply analysis by budget 1 apr-jun 2016Despite rising demand for affordable housing, there was a shortfall of eight percent in supply, indicating that developers are not yet focusing on launching budget projects. • A similar trend was observed across the mid-income housing (Rs 40-60 lakh) segment where demand exceeded supply by four percent in Apr-Jun 2016.
  • The supply surpassed demand by 1516 percent in the high-income housing category. In line with the reluctant market sentiments, even seasoned investors were not willing to exorbitant housing units.
  • While the supply of luxury housing units (priced Rs 1-2 crore) in the city stood at 14 percent in Apr-Jun 2016, its demand was noted to be around 17 percent.
  • Ultra-luxury housing (units priced beyond Rs 2 cr.) continued being the least popular and supplied segment. 
  • Barring Central Bangalore, no other zone had significant availability for ultra-luxury inventory.

Demand and supply analysis by budget apr-jun 2016

  

By Configuration 

  • Bangalore demand and supply analysis- By configuration 1 apr-jun 2016The 2BHK configuration captured half the demand in Bangalore, indicating homebuyers’ preference toward affordable and compact houses. The supply, too, at almost 50 percent, was in line with the demand.
  • The 2BHK configuration is particularly popular among the migrant working segment as well as single professionals who move to the ‘Silicon Valley’ of India for job opportunities.
  • Most zones recorded a robust supply of 2BHK units, followed by 3BHK  units. Similar to 2BHK homes, 3BHK too saw a marginal difference between demand and supply levels, indicating a positive scenario.
  • The 1BHK format was the least popular configuration in Bangalore with a negligible percentage of supply levels across all zones.

Bangalore demand and supply analysis- By configuration apr-jun 2016

 

By Construction Status

  • Bangalore demand and supply analysis- By  construction status apr-jun 2016Availability of ready-to-move-in properties surged by five percent Q-o-Q and the demand also went up by two percent, indicating increasing buyer preference for projects offering immediate possession.
  • Central and West Bangalore supplied maximum number of ready-to-move units followed by availability in the range of 70-73 percent in East, North and South Bangalore.
  • The two percent decline in popularity of under-construction units reflected buyer disinterest for such units.
  • However, a five percent fall in supply levels of under-construction units implies that either the unsold stock in this segment is getting offloaded or developers have started refraining from launching new projects in the wake of rising unsold inventory for such units.

Bangalore demand and supply analysis- By construction status apr-jun 2016

Bangalore Annexures_Apr-Jun 2016


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