Single-window clearance for realty projects
Quashing the need to approach 14 different government agencies to seek building approvals, the State formed a single-window clearance mechanism for residential projects covering 1,200 sq ft and more. The online system will approve the projects abiding with the building norms and zonal regulations within a month.
Infrastructure projects receive a fillip
The Karnataka government announced the development of six inter-connected elevated corridors, and an addition of 80 electric buses to improve and augment the use of public transport. In another move, nearly 10 infrastructure projects in the city were freed of land acquisition issues as the Defense Ministry agreed to hand over 45,465 sq m of land to the State.
State proposes regularisation of B Khata properties
The proposal to delink B Khata properties from the Akrama-Sakrama Scheme, and amend the Karnataka Land Revenue Act, 1984 in a way that allows the conversion of such properties falling under the Corporation limits to A Khata cheered homeowners. The conversion would require owners to pay the improvement and conversion charges to the civic body.
Namma metro Phase II gets delayed
After the malfunctioning of the boring machines, another hurdle pertaining to land acquisition hampered the construction work on the Nagawara-Gottigere Line of the Namma metro. The work is anticipated to resume only after the Defence Ministry transfers it to the metro rail corporation.
Capital and rental rates in Bangalore strengthened this quarter, although marginally. New launches, however, dipped for the second consecutive quarter across budget segments. Of the total new supply, close to only 12 percent fell in the affordable housing category since developers found it an unviable business proposition. Buyers, mostly unaware of RERA, maintained a cautious stance towards property investments, marring sales in the segment. The proposed development of nearly 60,000 affordable homes in the State under PMAY is expected to smother the disparity in demand and supply of homes priced within Rs 40 lakh in Bangalore.
Property sales in the first month of the Jul-Sep 2018 quarter slackened due to the withdrawal of buyers during the inauspicious ‘aadi’ period. However, a series of reforms this quarter paved the way for growth in Bangalore’s residential landscape.
On a macro level, the gradually resolving land acquisition issues strengthened prospects of development in the city. The decision to regularise B Khata properties and to introduce a single-window clearance mechanism also boosted buyer and developer sentiment. The proposed spike in Guidance Values by 10-30 percent received flak, but propelled buyers to close deals before the prices sprung from October onwards, resulting in increased sales towards the end of the quarter. With the festive months in the offing, Bangalore closed Q3 2018 on a positive note. The ensuing festive quarter is expected to witness renewed interest of buyers as developers are expected to resurge with freebies and discounts.
The lull in property sales in July and a spike in the ensuing months tempered the performance of the capital market in Bangalore this quarter. The rental landscape, however, continued to boom on account of the expanding commercial market. Improving metro connectivity boosted rental demand in erstwhile locations, too, resulting in the average weighted rental prices to surge by four percent, YoY.
Property enquiries maintained status-quo in Bangalore this quarter. The marginal improvement in the average weighted capital prices is primarily attributed to the positive buying sentiment ahead of the festive season and the proposed spike in the Guidance Values. Locations such as Sanjay Nagar, Basavangudi and Jayanagar witnessed enhanced sale closures in anticipation of the increased circle rates and as a result, reported a price hike to the tune of 1-4 percent, QoQ.
In line with the previous quarters, buyers remained wary of the under-construction segment. Developers’ attempts at offloading the unsold inventory of over 62,000 units continued at full gusto, translating into a 10 percent reduction in the saleable stock. The inclination towards the ready or near-ready homes benefitted the developed locales of Indira Nagar, CV Raman Nagar and Marathapalli in the East, Hulimavu, Begur and Koramangala in the South, and Nagavara, Hormavu and Hebbal in the North. Average capital prices in all these areas appreciated by 2-4 percent, QoQ.
The popular hubs of North, East and South Bangalore bagged the maximum number of new launches in the city. Overall, the city witnessed close to 6,000 new unit additions with Grade A developers taking the lead. Compliance with RERA continued to drive sales in projects priced beyond Rs 40 lakh. Lack of awareness amongst the Lower Income Group (LIG) and Middle Income Group (MIG) homebuyers resulted in poor response towards RERA-approved budgeted projects.
The expanding IT base and improving metro connectivity played an important role in boosting the rental market. The economic hubs of Whitefield in the East and Electronic City in the South remained the epicenters of rental demand. While rental rates in locales close to Whitefield, such as Hoodi, ITPL and Varthur grew by 6-9 percent, YoY, Bommasandra near Electronic City garnered maximum demand from the tenant community.
The capital and rental landscapes of Electronic City, however, failed to report any noticeable improvement owing to an excess of housing stock. The locality witnessed the launch of a 1,000 more residential units this quarter, spoiling potential buyers and tenants for choices and restricting price growth. Rental rates in the area vary between Rs 15,000 and Rs 20,000 per month.
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