Bangalore Insite Report Oct-Dec 2014

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City Highlights

Repeating the trend of Jul-Sep 2014, Bangalore’s real estate market grew at an average rate of five per cent in the Oct-Dec 2014 quarter as well. Infrastructural advancements and increasing economic activities in the city kept housing demand robust in Bangalore.

Banngalore map

  • KEY INFLUENCERS

    • The expansion of Namma metro in its phase II towards North and South Bangalore
    • Reception of Foreign Direct Investments in several residential projects impacting customer sentiments and boosting affordable housing.
    • Focus on creating a Smart City in Bangalore. CISCO aims to create a Smart City in Electronics City Industrial Township - Asia’s first Internet of Things (IoT) innovation hub.
    • Development of the Kempegowda International Airport in the North.
    • Development of Bangalore-Mumbai Industrial Corridor with five National Investment and Manufacturing Zones near Tumkur
    • Expansion of road network through Peripheral Ring Road and Bangalore- Mysore Infrastructure Corridor (NICE Road). 

    After a three per cent hike in Jul-Sep 2014, East Bangalore recorded maximum growth of seven per cent in this quarter.

  • West and South Bangalore followed with each clocking a five per cent rise in capital values. Growth in the two regions was slower in comparison to the previous quarter where both regions recorded a nine per cent hike.
  • The market improved in West Bangalore owing to the growing positivity in investor sentiments due to the upcoming industrial belts at Tumkur and Kengeri. Mysore Road recorded a quarter-on-quarter price rise of 12 per cent, higher than any other locality in the west.
  • The northern region saw positive movement of three per cent in this quarter after a slight dip in the last quarter. Proximity to the airport, presence of office spaces and proposed investment corridors kept investor demand high here. Hennur Road saw the fastest price movement in the region in the current quarter.
  • Information Technology (IT) industry remained the key growth driver for North, East and South regions of the city.

“Property prices in East Bangalore rose by an average of 7%, followed by West and South which recorded 5% hike each.”

  • Similar to the previous quarter, out of the ten top performers of the city, southern localities held the maximum (almost 60 per cent) share, followed by eastern localities which bagged about 30 per cent share in the Oct-Dec 2014 quarter.
  • Hosur Road from South emerged as the top grosser of the city with 22 per cent hike. Jayanagar, Uttarahalli, Kanakapura Road and BTM Layout were other southern areas which were in the list of top performers.
  • Half of the top poor performers of the city were reported to be in the northern region. East followed, again with 30 per cent share on the list.
  • Jalahalli, Thanisandra and RMV Extension from north recorded the steepest drop in property prices (four per cent to 11 per cent) in this quarter.
  • The rental market in the city remained robust with metro impacting the lease rates significantly in several localities. On an average, the rental rates saw an appreciation of 16 per cent between Oct-Dec 2014 and Oct-Dec 2013.
  • While the rental values in East and South Bangalore rose by 15 per cent each in the last one year, the rates in North went up by 17 per cent. Yeshwanthpur and Sahakara Nagar were the top gainers in the rental market due to improved connectivity by third reach of Namma Metro.
  • In terms of supply, the city saw maximum supply for residential apartments configured as 2BHK and 3 BHK units.
  • Across various budget ranges, supply for affordable housing (Within Rs 40 lakh) and middle income housing (Rs 40-60 lakh) topped with 28 per cent and 29 per cent share, respectively.
  • The city recorded maximum absorption of budget housing projects with prices ranging between Rs 2000-3000 sq ft.
  • Maximum demand for housing continued to be recorded in areas most conveniently connected by the Namma Metro. As per JLL India, close to 16,000 units in about 30 projects are being constructed in the city in the affordable budget  category. However, demand still exceeds supply by a considerable amount.
  • The reception of Foreign Direct Investments (FDI) in several residential projects of the city is expected improve delivery time and provide a spurt to new launches in the city, particularly in the affordable housing segment, thereby impacting overall buyer sentiments. 

Top performers in Bangalore

 

Top non performers in Bangalore

Residential Land Analysis

  • Top performers for land in bangaloreSimilar to the previous quarter, South Bangalore had the maximum localities where residential land performed well. The region made up half of the list of top ten performers in this category.
  • Land in Electronics City recorded the maximum hike of 17 per cent amongst all south region localities. Being an industrial township, the area saw increased demand for land from several global firms. With Cisco aiming to convert Electronics City into a Smart City in the future and Asia’s first Internet of Things (IoT) innovation hub, demand for the location has gone up significantly.
  • After a healthy rise in land values in the Jul-Sep 2014 quarter, HSR Layout recorded a 14 per cent hike in this quarter. Over a period of one year, the values here have recorded a rise of almost 25 per cent. Preference to invest near IT corridors and the availability of land approved by Bangalore Development Authority (BDA) drew investors here.
  • Top non performers for land in BangaloreOther localities which fared well due to availability of BDA plots were Koramangala and Banashankari. The prices here hiked by an average of 12 per cent to 13 per cent quarter-on-quarter and 29 per cent to 38 per cent year-on-year.
  • Jayanagar too recorded a 13 per cent hike, probably due to paucity of land parcels.
  • Yelahanka in the North emerged as the top grosser for price appreciation of residential land in the Oct-Dec 2014 quarter. Majority buyers of land were second property buyers seeking healthy returns on investment (ROI). The locality registered a 46 per cent hike in the last one year.
  • While Chikkaballapur recorded second highest increase in land prices in this quarter, there was an overall drop of 25 per cent since 2013.
  • Hoskote in the East and Sahakara Nagar in the North recorded the steepest dip to the tune of 29 per cent to 30 per cent. While majority demand in Hoskote was for built units, the limited number of land buyers also spilled over to areas closer to the city due to slow paced real estate development here.

"Land values in Yelahanka increased by 25 per cent in this quarter. Proximity to the upcoming Kempegowda International Airport and increase in job opportunities in the region were key factors spurring investor demand."

BANGALORE > East And South Zone

Bangalore zone 1 mapDominated by the IT Industry and driven by affordability, South Bangalore recorded an average price hike of five per cent in this quarter, whereas, the eastern region grew by seven per cent. Out of the total localities tracked, almost 70 per cent recorded positive price movements. Both the regions together recorded highest demand and maximum new launches in the city.

  • Marathahalli, Hoodi and Babusapalaya recorded maximum price hike of 18-20 per cent hike in this quarter. Since Hoodi and Marathahalli fall closest to the IT companies of the East, they commanded high preference from end-users.
  • Presence of software companies within Marathahalli kept rental demand high and pushed rental rates by 22 per cent. Cashing in on the growing housing demand in the location, several developers launched new projects here.
  • Prices in Babusapalaya went up by 18 per cent due to its comparative affordability to other eastern localities and its strategic location along the Outer Ring Road (ORR). Out of the total localities tracked, almost 80 per cent localities had prices higher than Babusapalaya.
  • Residential pockets on ORR registered an average hike of 10 per cent. Banaswadi, located along the ORR, witnessed a price hike of 11 per cent. Offering approved layouts at prices almost 40 per cent lower than Cooke Town, located 3 km away, Banaswadi attracted several investors for better ROI.

“Affordable prices and proximity to Whitefield pushed property prices in Gunjur, Varthur and Panathur by 6%-7%."

  • Despite being the major growth driver in the East, Whitefield witnessed a marginal price increase of five per cent. Heavy traffic jams were a major deterrent for the locality. However, the latest attempts by the traffic police to improve the traffic congesttion here are expected to boost realty market in future.
  • CV Raman Nagar recorded a moderate hike of 10 per cent in this quarter. Comparative affordability to Indira Nagar and easy connectivity by Namma Metro continued to fuel demand here.
  • Namma metro acted as a growth catalyst for Indira Nagar as well, which recorded a price hike of nine per cent in this quarter.
  • Property prices in HBR Layout witnessed an appreciation of 10 per cent in this quarter. Availability of BDA Layouts and connectivity by the signal free corridor of ORR | were the major growth drivers.
  • Similar to the previous quarter, land values dipped in Hoskote, whereas, apartment values went up in the Oct-Dec 2014 quarter. Absence of social and physical infrastructure led to reduced demand for individual plots. But the trend prompted developers to launch large scale residential projects on the lines of integrated townships.
  • Availability of large land parcels and affordable property prices drew attention towards Gunjur. New project launches within a budget of Rs 25-30 lakh led to increased demand, and hence, a price hike of seven per cent. Its location along the ORR, proximity to the two major IT hubs – Whitefield and Electronics City and the upcoming Peripheral Ring Road (PRR) resulted in positive investor sentiments.
  • Panathur saw development similar to Gunjur. With property values almost 15 per cent lower than Whitefield, Panathur also attracted several low and middle budget homebuyers. The locality recorded an average price hike of six per cent this quarter.
  • Similar to the previous quarter, TC Palaya and Sarjapur Road continued to record dipping prices. Lack of public transport and underdeveloped civic amenities pushed buyers to other similarly priced areas.
  • Indira Nagar and Brookefield recorded a significant hike in rental rates due to high demand and lack of new supply.

 Capital Values

Locality

Oct-Dec 2014

Jul-Sep 2014

Change

Babusapalaya

4000

3400

18%

Banaswadi

5000

4500

11%

Brookefield

5150

5200

-1%

Cooke Town

8000

7500

7%

CV Raman Nagar

5500

5000

10%

Gunjur

4000

3750

7%

Haralur Road

5500

5500

0%

HBR Layout

5500

5000

10%

Hoodi

4700

4000

18%

Hoskote

3350

3050

10%

Indira Nagar

8700

8000

9%

ITPL

5000

4500

11%

Kadugodi

4200

3800

11%

Kaggadasapura

3950

3650

8%

KR Puram

4625

4300

8%

Kundalahalli

5200

5000

4%

Mahadevpura

5125

4750

8%

Marathahalli

5500

4600

20%

Old Airport Road

5350

5000

7%

Old Madras Road

5250

5000

5%

Outer Ring Road East

5500

5000

10%

Panathur

4250

4000

6%

Rammurthy Nagar

4500

4300

5%

Sarjapur

3500

3500

0%

Sarjapur Road

4600

4750

-3%

TC Palaya

3600

3750

-4%

Varthur

4000

3800

5%

Whitefield

5000

4750

5%

    Rental Values

Locality

Oct-Dec 2014

Oct-Dec 2013

Change

Brookefield

22

18

22%

Marathahalli

22

18

22%

Sarjapur Road

21

18

17%

Indira Nagar

25

22

14%

Whitefield

20

18

11%

Old Madras Road

16

15

7%

* Values represent average capital and rental per sq ft rates

  • Rapid absorption of office space and expansion of retail activities on Hosur Road and Electronics City resulted in increased housing demand in the area. In addition, the inception of a 10 km long Elevated Highway between Electronics City and Madiwala also resulted in the area to clock healthy returns. Hosur Road witnessed a price hike of 22 per cent in this quarter.
  • With several flyovers being planned on Hosur Road by Bruhat Bengaluru Mahanagara Palike (BBMP) and Bangalore Development Authority (BDA), the traffic situation is expected to ease out, further pushing the realty market here.
  • Situated on Hosur Road, and therefore, driven by the same factors of growth, BTM Layout recorded an 11 per cent price hike in property prices and 13 per cent hike in rental values.

“Rental values on HSR Road and Bannerghata Road went up by 19%-22%. Proximity to Electronics City and affordable rentals fueled demand."

  • BTM Layout Stage II also witnessed a healthy price movement due to availability of land parcels for new developments and its comparative affordability to Jayanagar, located three km away. The prices in BTM Layout Stage II were almost 30 per cent lesser than that in Jayanagar.
  • Improved connectivity via the NICE Ring Road and the upcoming metro benefitted both Kanakapura Road and Bannerghata Road. Both the areas recorded a quarter-on-quarter price rise of 11 per cent to 14 per cent.
  • Located close to Jayanagar and JP Nagar, two most affluent localities in the South, Uttarahalli was preferred by homebuyers due to affordable property values. Availability of large tracts of BDA approved land was a major attraction for investors here. The property prices went up by 15 per cent in Uttarahalli.
  • Other localities which saw a moderate hike of five to nine per cent were Electronics City, Kudlu Gate, HSR Layout and Koramangala. Proximity to the IT companies and well-built social infrastructure kept the housing demand robust here. 

Capital Values

Locality

Oct-Dec 2014

Jul-Sep 2014

Change

Akshaya Nagar

4000

3900

3%

Attibele

2800

2800

0%

Banashankari

5600

6500

-14%

Bannerghatta Road

4700

4250

11%

Begur Road

3850

3750

3%

Bellandur

6000

5750

4%

Bommanahalli

4100

4100

0%

BTM 2nd Stage

7000

5850

20%

BTM Layout

6500

5850

11%

Chandapura

3000

3000

0%

Electronic City

3800

3500

9%

GB Palya

5350

5000

7%

Hongasandra

4150

4150

0%

Hosa Road

3950

4200

-6%

Hosur Road

5000

4100

22%

HSR Layout

6250

5900

6%

Jayanagar

10400

9000

16%

JP Nagar

5200

4950

5%

Kanakpura Road

4000

3500

14%

Koramangala

8000

7500

7%

Kudlu Gate

5150

4800

7%

Singasandra

3950

3800

4%

Subramanyapura

3900

4000

-3%

Uttarahalli

3800

3300

15%

5th Phase JP Nagar

5000

5000

0%

7th Phase JP Nagar

4750

4750

0%

8th Phase JP Nagar

4000

4450

-10%

 Rental Values

Locality

Oct-Dec 2014

Oct-Dec 2013

Change

HSR Layout

22

18

22%

Bannerghatta Road

19

16

19%

JP Nagar

26

22

18%

7th Phase JP Nagar

17

15

13%

Electronic City

18

16

13%

BTM Layout

18

16

13%

Koramangala

28

25

12%

Bellandur

20

18

11%

* Values represent average capital and rental per sq ft rates

BANGALORE > North and West Zone

North and West Bangalore together recorded an average price growth of 4 per cent. Out of the total localities tracked, almost 70 per cent recorded positive price movement. Development of industrial corridors resulted in robust demand from investors.

  • Bangalore zone 2 mapHennur and Hennur Road in North recorded a healthy price movement to the tune of seven per cent to 15 per cent in the Oct-Dec 2014 quarter. In fact, Hennur Road emerged as the top gainer in the region this time. Launch of a few premium projects by developers such as Elegant Properties and RMZ Corp and affordable projects by Dreamz Infra India, Mahima Group and Unishire Group attracted all segments of homebuyers.
  • Hennur Road recorded a healthy demand from Non-Resident Indians (NRIs), specifically due to its proximity to both the Central Business District and the upcoming International Airport at Devanahalli, about 25 km away.
  • Mysore Road in West and Nagavara in North were the second highest gainers in this quarter with 12 per cent price appreciation each. Availability of large land parcels on Mysore Road attracted several developers to launch mid and large scale residential projects offering apartments and independent houses. Proposed connectivity by Namma Metro and the development of NICE Ring Road as Bangalore–Mysore Infrastructure Corridor (BMIC) were other factors which instilled positive investor sentiments for the location.
  • High investor demand also led Mysore Road to witness healthy appreciation in land values. The values grew by 20 per cent on a quarter-on-quarter basis and by 26 per cent on a year-on-year basis.
  • Growth in Nagavara was majorly attributed to the planned Phase II of Namma Metro. The locality would be connected to the line starting from Gottigere in South. Proximity to Manyata Tech Park and other offices located in Hebbal and Hennur also gave the necessary impetus to the housing demand here.
  • In addition, comparative affordability to Hebbal, located 2.5 km away, also spilled homebuyer demand to Nagavara. Properties in Nagavara were priced almost Rs 200 per sq ft lower than Hebbal. Owing to this, Hebbal recorded only a moderate hike of five per cent in this quarter.

“Hennur Road in North and Mysore Road in West offered highest quarter-on-quarter ROI to the tune of 12%-15%."

  • Located at the periphery of Mysore Road, Kengeri also grew due to the proposed connectivity by Namma Metro and proximity to the NICE Ring Road. Offering affordable land and apartment values, the locality attracted homebuyers in search of low cost premium properties. Several developers such as Pioneer Developers and Umang Realtech, among others, launched premium projects in affordable price brackets here.
  • Hormavu in North, located close to HBR Layout and Rammurthy Nagar, recorded robust housing demand due to lower property prices in comparison to nearby areas.
  • While the property prices in Hormavu were in the range of Rs 4500 per sq ft, HBR Layout offered properties at Rs 5500 per sq ft. Also, Hormavu suited end-users for availability of apartments, whereas, HBR Layout offered more of independent houses and villas.
  • Similar to the previous quarter, Yeshwanthpur recorded a four per cent hike in its property prices in this quarter as well. Its connectivity by Namma Metro not only impacted its property prices, but also the rental values. The Oct-Dec 2014 quarter saw rental rates in Yeshwanthpur going up by 31 per cent, the maximum in this region.
  • Rajaji Nagar, which recorded a whopping 24 per cent price hike in the previous quarter, recorded only a slight movement of three per cent in this quarter. Housing demand remained consistent in the area after its connectivity by the metro, mainly due to its high ticket price.
  • Several northern region localities falling around the Bellary Road, such as Vidyaranyapura, Yelahanka, RMV Extension, Thanisandra and Jalahalli recorded dipping property values in the range of two per cent to 11 per cent. Weak customer sentiments due to absence of social infrastructure, reduced sales and therefore, oversupply of housing units were major factors resulting in the dipping values.
  • Bellary Road, which later emerges as the Bangalore-Hyderabad Highway also leads to the upcoming Kempegowda International Airport at Devanahalli. The strategic location as well as the growing economic activities in the region add to the healthy prospects of these localities in future.
  • Apartment prices continued to drop in Yelahanka and Sahakara Nagar due to investors largely focusing on Devanahalli for investments. However, both the localities saw increased demand for rental accommodations and, therefore, a jump in lease values by 20 per cent to 30 per cent in the last one year. Maximum demand was noted from the workforces of Manyata Tech Park and Peenya Industrial Area located about 12-14 km away. Affordable prices were a major attraction for middle income home seekers.
  • Malleshwaram continued to record robust rental demand due to connectivity by Namma Metro. Apart from easing the commutation, metro has also improved traffic congestion here.

 Capital Values

Locality

Oct-Dec 2014

Jul-Sep 2014

Change

Hebbal

5800

5500

5%

Hennur

4800

4500

7%

Hennur Road

4950

4300

15%

Horamavu Agara

4200

3900

8%

Hormavu

4500

4200

7%

Jakkur

4500

4250

6%

Jalahalli

4100

4600

-11%

Kengeri

3800

3500

9%

Magadi Road

4400

4350

1%

Mysore Road

4200

3750

12%

Nagavara

5600

5000

12%

R.T. Nagar

5150

5000

3%

Raja Rajeshwari Nagar

4500

4500

0%

Rajaji Nagar

13350

13000

3%

RMV Extension

7000

7300

-4%

Thanisandra

4200

4500

-7%

Vidyaranyapura

4400

4500

-2%

Yelahanka

4100

4200

-2%

Yeshwanthpur

7800

7500

4%

Rental Values

Locality

Oct-Dec 2014

Oct-Dec 2013

Change

Yeshwanthpur

17

13

31%

Sahakara Nagar

17

13

31%

Yelahanka

17

14

21%

Malleshwaram

25

21

19%

Hebbal

21

18

17%

Jalahalli

15

13

15%

Hennur Road

16

16

0%

Jakkur

13

13

0%

Supply Analysis

With IT Industry being the major real estate driver for Bangalore, there was maximum demand and supply noted for multistory apartments. Software professionals migrating to the city preferred small and affordable properties. Hence maximum supply was recorded for 2BHK units followed by 3BHK units. 

Property type bangaloreAvailablity of Different Types of Property

  • The distribution of various property types such as apartments, builder floors and independent houses/villas remained unchanged in the current quarter as compared to the previous quarter.
  • While apartments were the most supplied and constituted much more than three quarters of the total market, independent houses/villas were the next most supplied and made up 13 per cent of the market share.

Budget wise BangaloreAvailability of Property in Different Budgets

  •  Between all budget categories, the affordable housing segment within Rs 40 lakh and the middle income housing segment of Rs 40-60 lakh made up more than half of the total market share in this quarter.
  • Within the middle income housing budget, close to 60 per cent properties were under construction, whereas, the rest were were ready to move in. The share of under construction properties in this budget category rose by eight per cent since the last quarter.
  • The next most supplied budget category was the high income housing segment (Rs 60 lakh – Rs 1 crore) which made up a quarter (25 per cent) of the total market share. The category offered an almost balanced ratio of ready to move in and under construction properties.
  • Under the affordable housing segment (Within Rs 40 lakh), close to three fourth were under construction. There was a marked increase of 10 per cent in the number of properties being constructed in this category, since Jul-Sep 2014.
  • The luxury housing segment (Rs 1crore - Rs 2 crore) constituted 13 per cent of the total inventory in this quarter. This category too witnessed a balance between supply of ready to move in and under construction properties.
  • The ultra-luxury budget category of Rs 2 crore - Rs 5 crore witnessed lowest supply in the city. The share of ready to move in properties was slightly higher (four per cent) than under construction properties.

“High demand for budget properties led to maximum supply for properties in the affordable housing and mid income housing."

RTM UC BangaloreReady to Move vs. Under-construction

  • Majority properties (70 per cent) on sale in the city were ready to move in. The rest (30 per cent) were under construction, indicating suppressed new launches.
  • Out of the total under construction properties, more than one third were priced within Rs 40 lakh, followed by Rs 40-60 lakh.
  • The share of under construction properties remained considerably high in the high income housing segment as well (22 per cent). Supply of under construction properties in this budget went down slightly from 24 per cent in Jul-Sep 2014 to 22 per cent in Oct-Dec 2014.
  • The city saw least number of properties being constructed in the luxury housing segment (Rs 1 crore - Rs 2 crore) and the ultra-luxury housing segment (Rs 2 crore - Rs 5 crore).
  • Distribution of ready to move in units across various budget ranges remained almost stable between the two quarters. The middle income and high income housing segments constituted more than half of the total supply.

BHK wise BangaloreBHK- wise Distribution of Property

  • In terms of configurations, 2BHK units made up more than 50 per cent of the total market. 3BHK units closely followed by recording almost 40 per cent supply. The distribution of various configurations remained unchanged over the period of July and December 2014.
  • 1BHK units were the least offered in the city and were mostly available in under construction state. The share of under construction properties in the 1BHK category went up by 10 per cent in this quarter.
  • The 2BHK category too reported a hike in share of under construction properties. While 62 per cent 2BHK units were available in the under construction state, 38 per cent were available as ready to move in.

 


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  • Comments
  • Kayo April 14, 20161:44 am

    I can’t believe. I have been going for years without knowing this information.

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