Smart City project gets State funding
Karnataka Government has sanctioned a whopping Rs 1,656 crore for the development of Smart Cities in the State. Tumkuru Road, the stretch planned to be developed into a smart city in Bangalore, is touted to benefit from this. The parallel industrial development along the expanse will thrust residential growth here.
BDA launches two mega housing projects
The Bangalore Development Authority (BDA) launched two residential projects worth Rs 759 crore at Bidarahalli Hobli in East Bangalore. Focusing on 3BHK units, the step is an initiative to propel housing supply in city peripheries. The projects will offer 1,344 flats configured as 3BHK units with a carpet area of 1,150 sq ft. Another 1,120 homes will be configured as 2BHK and 1BHK units with a carpet area of 672 sq ft and 450 sq ft, respectively.
BDA releases city Master Plan 2031
The new draft Master Plan 2031 by BDA bans commercialisation on roads measuring less than 41 feet and gives a boost to heritage preservation. Another major takeaway from the plan is the opening of peripheral land up to 80 sq km for urbanisation across five corridors: Hosur Road, Mysore Road, Bellary Road, Old Madras Road and Sarjapur Road.
Government mandates STP provision in residential projects
Bangalore Water Supply and Sewerage Board (BWSSB) announced penalties on housing societies failing to install Sewage Treatment Plants (STPs) by December 31, 2017. This has come after 10,000 home owners held a rally against the mandate which implies a mammoth investment. Levying penalty for the purpose may bolster resentment amongst owners.
Bangalore continued to display resilience to market distractions, economic upheavals and aberrations. The city led the rental graph with a three percent rise in average weighted values in the last one year.
New launches and housing sales recorded improvement against the previous quarter. IT-driven hubs in South and East Bangalore remained the popular choices for buyers and developers, alike. Yelahanka, from the investordriven northern region, garnered ample buyer interest owing to its lucrative location close to the airport and healthy growth potential.
The disruptions caused by RERA and GST continued to keep stakeholders anxious of an uptick in Bangalore’s real estate pricing. End-user demand maintained the cushioning, thereby preventing an impasse in sales and residential supply, as witnessed in metros such as Delhi NCR and Mumbai.
The Oct-Dec 2017 quarter, however, received a beating as Karnataka Government denied registrations to ongoing projects with improper title deeds, leaving buyers to fend for justice on their own. The snail-paced registration process aggrieved homebuyers and developers, with the latter further suffering on account of tardy project approvals.
On the brighter side, Bangalore continued to account for the greatest share of office take-up in India. Taking a cue from the trends witnessed in Q3 and Q4 2017, the city is expected to garner increased traction in the commercial and residential markets in the forthcoming quarters of 2018
- The notion of connectivity driving realty growth is being continually reinstated in Bangalore’s real estate story. The two percent growth in average weighted capital prices of South Bangalore is largely attributed to the expanding metro network. Locations alongside the Green line of Namma Metro - Nagasandra to Yelachenahalli - including JP Nagar, Banashankari and Padmanabhanagar registered a price hike to the tune of two to three percent, each, in the quarter ending December 2017 against the previous one.
- On the contrary, the stretch along Hosur Road, lacking direct metro connectivity, saw capital rates dwindling in the same period. Areas such as Doddathoguru, Harlur and Begur witnessed a marginal price correction of two percent, each. Excess residential inventory and massive traffic snarls, too, are to be blamed for the poor response from homebuyers in these locations.
- Electronic City and Bommanahalli, also along Hosur Road, remained resilient to the adverse market forces in the current quarter. While the IT industry retained buyer interest in Electronic City, Bommanahalli attracted ample enquiries due to price-competitive residential stock.
- The prime locales of East Bangalore witnessed positive price movement owing to renewed interest of developers in the category. The upswing in the average weighted capital prices is a result of a few new launches in the luxury category by reputed developers such as Godrej and Prestige Group.Premium locations with a price tag exceeding Rs 5,000 per sq ft such as Hoodi, Kundalahalli, Panathur, Banaswadi and Brookefield regained momentum and registered a capital appreciation up to six percent, QoQ.
- Prime locations in South Bangalore including Basavangudi, Banashankari, JP Nagar, Bellandur, Subramanyapura, Arakere, Jayanagar and BTM Layout, too, posted positive price movement in Oct-Dec 2017, against Jul-Sep 2017.
- The rental market in the two regions remained upbeat with a three percent rise in average weighted rental prices. Reiterating the old trend, locations close to Whitefield and Electronic City (IT hubs) and directly connected by Namma Metro saw prices firming up by six to 10 percent in the last one year (Oct-Dec 2017 vs. Oct-Dec 2016).
The Oct-Dec 2017 quarter displayed an uncanny quietness with minimal changes in demand and supply dynamics. Buyers continued scouting for their ideal home in the ready segment and developers steadily progressed with ongoing projects. A modest number of new launches, majorly in a price bracket of Rs 4,000-6,000 per sq ft, maintained stagnancy in the inventory levels.
- The city’s appetite for ready-to-move homes surged this quarter by a small margin. Karnataka RERA’s decision to exclude projects with faulty titles marred buyer’s confidence. The community again glided towards ready homes to assure a safe real estate investment.
- With almost 30 percent share of buyer preference, the mid-income segment (Rs 40-60 lakh) remained the second choice after the affordable category (within Rs 40 lakh). A surge in demand for the former led to a shortfall of five percent in Oct-Dec 2017 against the preceding quarter.
- The city demonstrates a dire need for new supply in the affordable category. However, lack of incentives, lengthy approvals process and enhanced complexities under RERA repels developers, resulting in a 16 percent shortage of low-priced homes in the city.
- The inventory pile up nearing 1.2 lakh housing units in Bangalore largely falls in the luxury and ultra-luxury categories (beyond Rs 1 crore). Subdued sales mean a longer period of demand-supply disequilibrium in the city. However, with the market gaining momentum in sales of premium homes, the balance is expected to restore in the forthcoming quarters