Metro Phase 2 expansion gains momentum
With the settlement of land acquisition hurdles for the proposed depots, the work on the 72 km-long stretch of the Namma Metro Phase 2 has begun. The 128 km-long metro line is anticipated to become operational by 2024. As a part of Phase 2A project, the State has also approved the Outer Ring Road (ORR) line, connecting Central Silk Board Junction to KR Puram and KR Puram to Kempegowda.
Land conversion process goes online
The launch of a simplified affidavit-based online system for land-use conversion will reduce paperwork and expedite the process duration. Now, the time taken to convert land use pattern will be two months, as against six months to a year earlier.
Infra projects to begin on defence land
Bruhat Bengaluru Mahanagara Palike (BBMP) has received 11 acres of defence land to expedite multiple road infrastructure projects such as the construction of alternate stretch from Kavalbyrasandra Main Road to Modi Garden, development of road from Ejipura Ring Road to Sarjapur Ring Road and widening of Hosur-Laskar Road. The State also plans to execute several new projects worth Rs 8,015 crore under the ‘Nava Bengaluru Kriya Yojana’’.
Road widening projects underway
The much-awaited widening of the Tannery Road from 40 ft to 80 ft has finally commenced, benefitting the commuters in East Bangalore and those travelling to Kempegowda International Airport. Also, the land acquisition process has been initiated for the widening of the 3.6 km-long Begur Road, connecting Bannerghatta Road to Electronics City.
The Jan-Mar 2019 quarter saw a burgeoning residential market in Bangalore with the sale of over 15,000 housing units. Upcoming infrastructure projects, especially the expanding metro network, helped keeping the market sentiment upbeat. Ready units continued to be the homebuyers’ first choice. Even as enquiries for under-construction units posted a hike in Jan-Mar 2019, the city reported negligible transactions in the segment owing to the much-awaited revision in the GST regime.
While the GST rate cut from 12 to five percent on the under-construction segment cheered homebuyers, confusion prevailed over Input Tax Credit (ITC), which led buyers to adopt a wait-and-watch approach until April 2019. Surplus inventory, majorly in the under-construction luxury segment, restricted price growth in the city to a negligible one percent, QoQ.
East and South Bangalore bagged maximum enquiries owing to their proximity to the IT corridors, improving metro connectivity and ample housing inventory. Despite the Quarter-to-Sell (QTS) the residential stock in the city coming down to 10.3 from 10.6 last year, the city has around 93,000 unsold housing units. Like other metro cities, Bangalore displayed a shortfall of almost 20 percent in the supply of affordable homes, i.e. homes priced within Rs 40 lakh. The addition of 50,000 affordable units under PMAY (U) in the State might help the city bridge this gap. This along with the quick implementation of revised GST rates, timely execution of upcoming infrastructure projects, and faster approval under RERA would ensure a realty revival for Bangalore.
The year 2019 started on a positive note for Bangalore’s real estate market with healthier sales volume, consistent housing demand and improved number of new launches than the previous quarter. While the ambiguities pertaining to GST rates kept property price hike limited to a percent in the city, QoQ, Bangalore recorded the second highest sales in India with over 15,000 units sold in Q1, 2019. The rental landscape continued to narrate a happy tale with an uptick in average ‘ask’ by three percent, YoY.
In line with the previous quarters, East and South Bangalore continued to garner maximum housing demand and sales across the city. Housing hubs such as Whitefield, Marathahali, Kadugodi and Varthur in the East; and JP Nagar, Kudlu Gate, Bommanahalli and Hosur Road in the South received maximum enquiries from the homebuyer community in the first quarter of 2019.
While affordable and mid-income housing categories accounted for almost 65 percent of the total housing demand, a dip in the supply of such apartments by almost 25 percent marred the buying sentiment. To trim the demand-supply mismatch, developers reduced the average unit sizes in newly-launched projects to match the ‘ask’ price in localities of North and South Bangalore such as Hennur, Thanisandra, Hebbal, Devanahalli. All these areas are well-connected to the Kempegowda International Airport and the Outer Ring Road.
The residential pockets of the eastern belt such as CV Raman Nagar, Varthur and Gunjur, along with Kudlu Gate in the South, topped the popularity charts, recording a five percent spike in property prices, each, QoQ. However, the suburban areas of Bangalore such as Marathahalli in the East recorded a negligible surge in property values. A popular hub in the South, Uttarahalli, saw prices dipping by a percent in Jan-Mar 2019 vs. Oct-Dec 2018.
The rental landscape remained the prime gainer due to the availability of fresh inventory across the IT hubs of East and South Bangalore. The expanding metro connectivity also played a key role in boosting the rental market in the city.
Kadugodi from East Bangalore topped the market with 11 percent growth in average rental values, YoY. Other prime localities, including Doddathoguru and Hulimavu from South, and Nagavara and Hebbal from North, garnered an upsurge of 10 percent, each, in average rental ‘asks’ in Jan-Mar 2019 vs. Jan-Mar 2018.
On the commercial leasing front, a dip in the supply of Grade A office spaces in prominent markets such as Whitefield and Electronic City, and robust demand from the IT/ITeS and start-up sectors are anticipated to lead to an upward revision in commercial rental values by the year-end.
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.