Bangalore Insite Report Jul-Sep 2014

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Renting a home in Bangalore
City Highlights Bangalore’s real estate market grew at an average rate of 5 per cent with both West and South regions recording 9 per cent growth in the Jul-Sep 2014 quarter. Improved market sentiments after the General Elections and a slew of infrastructural developments in the city kept the market afloat.

Bangalore city map

  • Bangalore’s real estate market strengthened during the Jul-Sep 2014 quarter as almost all the zones recorded a hike in average property values, except North.
  •  The North region saw a marginal dip in this quarter despite Vidyaranyapura turning out to be the highest gainer of the region in the last quarter and of the city in the last one year.
  • South Bangalore region recorded the maximum hike of nine per cent with localities HSR Layout and BTM Layout witnessing price appreciation of more than 30 per cent.
  • West Bangalore emerged as the second highest gainer in the current quarter with Rajaji Nagar recording maximum price rise of 24 per cent.
  • In the East, localities such as CV Raman Nagar, Indira Nagar and Old Airport Road recorded a significant hike. However, considerable drop of values on Outer Ring Road (ORR) led the region to record a moderate price rise of three per cent.
  • Several ongoing infrastructural projects, such as, road development and civic infrastructure development projects kept the real estate market going steady. However, the focus remained on the development of metro. Maximum preference and thus, price movement was noted in areas being connected by the metro.

"Bangalore saw increased transactions in Jul-Sep 2014 due to an expected hike in Guideline Values in November 2014."

Key Influencers
  • After setting up offices in the East, IT companies are now expanding towards North and South
  • Development of Neo Bangalore – Hoskote to result in increased job opportunities
  • Improved connectivity by Namma Metro and Outer Ring Road
  • Widening of Varthur Road (State Highway 35) followed by proposed widening of Sarjapur Road, both impacting East
  • Development of Peripheral Ring Road with a budget of Rs 9,000 crore
  • Progress of Bangalore–Mysore Infrastructure Corridor (NICE Road)
  • Upcoming Bangalore-Mumbai Industrial Corridor with five National Investment and Manufacturing Zones near Tumkur
  • Development of Kempegowda International Airport in the North
  • Information Technology (IT) industry continued to remain a key influencer for the city’s housing demand.
  • The rental market too remained robust in the city. While South clocked an average hike of six per cent, North recorded a three per cent hike. The start of the third reach of Namma Metro from Sampige Road to Peenya resulted in a considerable rise in rental values in localities such as Yeshwanthpur, Sanjay Nagar and Malleshwaram.
  • Amongst the top 10 performing localities of Bangalore, South held the maximum share, followed by East in the Jul-Sep 2014 quarter.
  • While the eastern localities predominantly benefitted from the IT industry, other areas such as BTM Layout, HSR Layout, Koramangala and Hosur Road in the South were too driven by the upcoming IT companies in their vicinity.
  • Almost all the areas served by the IT industry garnered more buyer preference and thus positive price movement in comparison to other areas.
  • Though North Bangalore is touted to yield healthy returns, the current quarter saw only Vidyaranyapura performing exceptionally well due to improving connectivity and fast paced residential development.
  • Namma Metro too left a considerable impact on localities such as Indira Nagar and CV Raman Nagar which were already being served by it since October 2011 and Rajaji Nagar which started benefitting by it only in March 2014.
  • In the current quarter, the eastern and northern region localities emerged as the top non-performers in terms of price appreciation.
  • Lack of job opportunities, under-developed social infrastructure, poor connectivity and ongoing construction activities were the major factors which led the northern areas such as Yelahanka, Jakkur, Sahakara Nagar, Nagavara and Hebbal to be lesser preferred by end-users.
  • Though East is a preferred zone, peripheral areas such as Outer Ring Road, TC Palaya and Sarjapur Road continued to record dipping prices. Lack of public transport and underdeveloped civic amenities pushed the buyers to other similar priced areas.
Residential Land Analysis  Top performers land, bangalore
  • The area near Devanahalli International Airport in the North witnessed the largest hike in land values in the current quarter, as well in the last one year. Positive investor sentiments due to the upcoming Special Economic Zones and residential townships have resulted in the area to grow fast.
  • South Bangalore has the maximum localities where residential land performed well. In the Jul-Sep 2014 quarter, 60 per cent localities in the list of top 10 performers for residential land were from South. The best performance has been in HSR Layout. Availability of Bangalore Development Authority (BDA) plots and proximity to the IT companies of both South and East are the major factors fueling demand in the region.
  • While land was preferred by investors for healthy return on investments, it was also preferred by end-users to construct villas in the region for self-use.
Top non-performers land, bangalore
  • Mysore Road in the west also emerged as one of the top 10 performers. Widening of certain road stretches and the upcoming metro up till Kengeri are the major factors that have boosted land values here. Yelahanka and Chikkaballapur in the North have been the only areas in the city showing consistent drop in land values since last one year. With majority demand for plotted developments being concentrated near Devanahalli International Airport, the two areas are recording an oversupply of plots.
  • Despite recording an overall hike in the last one year, localities such as Whitefield, Sarjapur Road and Hoskote in the East and Anjanapura in the South witnessed a slight drop in the current quarter. A shift in preference towards apartments in these IT centric locations is seen as a major reason for the drop of demand and thus prices for land.

"Growing job opportunities and Government's efforts to improve infrastructure were the major factors impacting land values in the city. Therefore, North and South saw maximum localities reporting rising land values." 

Bangalore > East Zone Almost half the localities in the East registered price hike in Jul-Sep 2014 quarter, when compared to the previous quarter. On the contrary, one third of the localities recorded a drop, whereas, 15 per cent recorded stable values. IT industry, upcoming metro in its second phase and infra developments remained the key influencers for the region.

Bangalore easst map

  • Indira Nagar emerged as the top grosser of the zone by recording 32 per cent price rise in the Jul-Sep 2014 quarter over the preceding quarter, further strengthening its yearlong rally (year-on-year gain in capital values being 25 per cent). Its proximity to the Central Business District (CBD), connectivity by Namma Metro and paucity of land parcels for new residential development have led to price rise.
  • CV Raman Nagar recorded the second highest appreciation of 28 per cent in the current quarter. With properties available at a rate almost 50 per cent lower than those in Indira Nagar, housing demand spilled over to CV Raman Nagar. In addition, preference over nearby locations such as Krishnarajapuram and Mahadevpura due to Metro’s connectivity also fuelled overall demand. The locality also enjoys locational advantage due to proximity to KR Puram Railway Station, Manyata Tech Park, Bagmane Tech Park and RMZ Infinity Technology Park.
  • Construction of the ORR also left a positive impact on real estate market of CV Raman Nagar, along with Krishnarajapuram and Mahadevpura.
  • Other areas which recorded moderate price hike of 10 per cent to 11 per cent in this quarter include Kundalahalli, Marathahalli and Varthur due to healthy end-user demand from professionals employed in companies situated in ITPL, Whitefield and Outer Ring Road. In addition, investors eyed these locations in anticipation of price appreciation due to the development of Hoskote as Neo Bangalore.
  • Krishnarajapuram, Mahadevpura and Ramamurthy Nagar are also expected to benefit from the development of Hoskote which is an integrated township that will provide peripheral expansion of Bangalore towards the East. The proposed Satellite Township Ring Road (STRR) will connect all major satellite towns near Bangalore. Additionally, another Intermediate Ring Road (IRR) is proposed to connect Hoskote to the other parts of the city. Hoskote in itself, recorded a price hike of seven per cent in the present quarter.

"Indira Nagar, CV Raman Nagar and Old Airport Road emerged as top grossers with price appreciation between 20%-30% in the Jul-Sep 2014 quarter."

  • The widening of Varthur Road or the State Highway 35 (that has incidentally also seen a capital value appreciation to the tune of 45 per cent in the last one year) and the upcoming Namma Metro have positively impacted capital prices in Varthur and Whitefield in the current quarter. A portion of this road will also overlap the Elevated Signal Free Corridor proposed to bring together Vellara Junction and Hope Farm.
  • The marginal growth in Whitefield to the tune of five per cent is attributed to the oversupply of residential apartments. For the same reason, the rental market too witnessed a dip of six per cent. However, the presence of IT companies and the upcoming metro is expected to keep the demand and prices steady here. Most of the projects in Whitefield are under-construction and offer 2BHK and 3BHK multi-storey apartments, which are also the most demanded for both purchasing and renting here. Sarjapur Road too recorded a dip in prices to the tune of six per cent due to unsold inventory. The rental market here remained stable for the same reason.
  • The sharpest drop in capital values, i.e. of 21 per cent was witnessed on Outer Ring Road (Eastern stretch). A few unconstructed patches and absence of service roads led to a shift in interest of both end-users and investors. Distance from the main city, lack of public transport and security also kept the buyer sentiments low here. As a result, peripheral localities falling on or close to ORR such as Babusapalaya and Banaswadi also recorded slight drop in the current quarter.
  • In the rental market, the only area which recorded a hike was Domlur because of its convenient approach to the metro. Metro stations at Indira Nagar and Trinity are reachable within 10-15 minutes. Other areas in the region are expected to see a jump in rental values after the metro route is completed here.
  • The entire region recorded a healthy demand and supply for properties in the affordable and mid-budget segments, i.e. Rs 25 lakh-Rs 60 lakh and Rs 60 lakh-Rs 1 crore. The absorption for housing units priced above Rs 1.5 crore has been slightly low due to maximum demand from the middle-income IT professionals.
Capital Values - Bangalore East
LOCALITY APR - JUN'14 JUL - SEP'14 % CHANGE
Babusapalaya 3450 3350 -3%
Banaswadi 4400 4200 -5%
CV Raman Nagar 4000 5950 28%
Hoodi 3850 3600 -6%
Hoskote 2850 3050 7%
Indira Nagar 6950 9200 32%
ITPL 4000 3800 -5%
Kadugodi 3600 3500 -3%
Kaggadasapura 3600 3550 -1%
KR Puram 3450 3600 4%
Kunadanahalli 3600 4400 10%
Mahadevpura 4100 4250 4%
Marathahalli 4000 4500 11%
Old Airport Road 4200 5450 20%
Old Madras Road 4250 4250 0%
Outer Ring Road East 5600 4500 -21%
Rammurthy Nagar 3750 3900 4%
Sarjapur 3250 3250 0%
Sarjapur Road 4150 3900 -6%
Varthur 3200 3550 11%
Whitefield 4000 4200 5%

 

Rental Values - Bangalore East

EAST JUL - SEP'13 JUL - SEP'14 % CHANGE
Whitefield 16 15 -6%
Indira Nagar 19 18 -5%
Sarjapur Road 16 16 0%
Brookefield 15 15 0%
Domlur 18 19 6%

* Values represent average capital and rental per sq ft rates

BANGALORE > South Zone

Bangalore south map

In the Jul-Sep 2014 quarter, South Bangalore recorded an overall growth of nine per cent. Out of the total localities tracked, close to 80 per cent registered a rise in property values, whereas, a drop was seen in hardly 17 per cent localities. Improved connectivity and expansion of IT industry to this region have positively impacted growth.
  • HSR Layout recorded the highest jump of 49 per cent in the apartment values and 95 per cent in the land values in the Jul-Sep 2014 quarter, compared to Apr- Jun 2014 quarter. Strategic location between East and South Bangalore made it highly preferable for the workforces of the IT companies situated in Marathahalli, Old Airport Road and Sarjapur Road in the East and Electronics City in the South.
  • With a few projects such as BM Silver Woods, Shashank Primero and Asrithas Lifestyle nearing completion in HSR Layout, the asking rates in the secondary market have gone up, resulting in an overall hike in the locality. Better affordability in comparison to nearby areas such as Koramangala, Haralur and Bellandur also worked in favour of HSR Layout. On an average, there is a difference of 11 per cent to 60 per cent in capital values between HSR Layout and these localities.

"Residential land investors gained the most in South Bangalore. HSR Layout recorded 95% hike, followed by Uttarahalli, Hosur Road and Kanakapura Road which saw prices going up by 23%-42%."

  • Across the Hosur Road, Bommanahalli recorded 11 per cent hike in prices. Offering properties at an average price of Rs 3,600 per sq ft, it attracted homebuyers looking for properties priced even lower than HSR Layout.
  • Availability of large land parcels near Hosur Road, Kudlu Gate, Begur Road, Bommanahalli and Singasandra attracted several developers to launch residential projects here. As a result, these areas recorded a price appreciation between five per cent and 30 per cent. Major developers coming up with residential apartments in this region include ND Developers, Salarpuria Builders, Skylark Builders and Nambiar Builders.
  • Located just along the Hosur Road and having a well-built social infrastructure, BTM Layout is a preferred location amongst the professionals employed in Electronics City. However, paucity of land for new developments led to a considerable price hike in the last quarter and even in the last one year. The rental supply also remained stressed and the values went up by seven per cent in the Jul-Sep 2014 quarter.
  • Localities situated at the lower end of the Hosur Road, such as Attibele and Hosa Road, recorded a dip of two per cent to 15 per cent in the current quarter. Undeveloped roads, poor drainage and sewage system and inactivity on the front of residential development shifted the buyer’s interest towards other developed locations such as BTM Layout and HSR Layout.
  • Uttarahalli and Banashankari recorded a marginal appreciation of one per cent to five per cent owing to steady housing demand. However, Banashankari Stage III recorded a steep hike of 39 per cent. Being a comparatively new area, the locality offers ample scope of new development. The luxurious housing project by Tata Housing, The Promont, played a major catalyst in pushing up the average values in the locality. The location’s connectivity by the 100 ft road and the Bangalore-Mysore Industrial Corridor are other factors attracting homebuyers here.

"80% localities recorded rising property values. HSR Layout, Banashankari Stage III and Kudlu Gate were the top gainers of the region in the quarter ending in September 2014."

  • Kanakapura Road too recorded a healthy price rise of 15 per cent in Jul-Sep 2014 quarter and 25 per cent since Jul-Sep 2013. Proposed widening of Kanakapura Road, the development of Peripheral Ring Road and the connectivity by Namma Metro kept the investor sentiments high. Launch of new projects by reputed builders and possession of a few others resulted in an overall hike of prices on the stretch.
  • The premium areas of South Bangalore, JP Nagar and Jayanagar, continued to garner healthy rental demand over other developing areas due to their connectivity by metro. The rental values went up by 15 per cent to 30 per cent in the last one year. Electronics City reported a dip in rental values by 14 per cent as demand spilled over to other better developed areas such as Hosur Road, HSR Layout, JP Nagar and Jayanagar.

Capital Values - Bangalore South

LOCALITY APR - JUN'14 JUL - SEP'14 % CHANGE
Arakere 3350 3500 4%
Attibele 2950 2500 -15%
Banashankari 6700 6750 1%
Banashankari Stage III 5200 7250 39%
Bannerghatta Road 3500 3750 7%
Begur Road 2950 3300 12%
Bellandur 4450 5850 9%
Bommanahalli 3250 3600 11%
Bommasandra 3550 3600 1%
BTM 2nd Stage 5600 5300 -5%
BTM Layout 3900 5250 35%
Chandapura 2600 2600 0%
Electronic City 2950 3100 5%
Hosa Road 3200 3150 -2%
Hosur Road 3400 3950 16%
HSR Layout 4100 4800 49%
JP Nagar 4300 4750 10%
7th Phase JP Nagar 4450 4500 1%
Kanakapura Road 3700 4250 15%
Koramangala 6550 7800 19%
Kudlu Gate 4100 5200 27%
Singasandra 3750 3950 5%
Uttarahalli 3300 3350 2%

Rental Values - Bangalore South

LOCALITY JUL - SEP'13 JUL - SEP'14 % CHANGE
BTM Layout 15 16 7%
JP Nagar 14 16 14%
Bannerghatta Road 13 13 0%
Koramangala 23 26 13%
Jayanagar 16 21 31%
7th Phase JP Nagar 15 16 7%
HSR Layout 16 17 6%
Kanakpura Road 10 10 0%
Bellandur 16 16 0%
Electronic City 14 12 -14%

* Values represent average capital and rental per sq ft rates

BANGALORE > North and West Zone

Bangalore NW Map

In this quarter, Bangalore West recorded an average appreciation of nine per cent, as opposed to a marginal drop of one per cent in the North. Predominantly an industrial and a warehousing hub, growth of West Bangalore in the residential market is expected to be backed by the development of the industrial corridors near Tumkur and Kengeri. North, on the other hand is backed by the upcoming Kempegowda International Airport.
  • Rajaji Nagar in the west emerged as the highest gainer in the region by recording 24 per cent price appreciation in the present quarter, primarily due to new found connectivity being offered by Namma Metro, started earlier this year. The nearest stations serving Rajaji Nagar are situated at Malleshwaram and Mahalakshmi Subway in the North and at Magadi Road and Hosahalli in the South.
  • The launch of a few luxury projects priced between Rs 2 crore-Rs 5 crore by developers such as Shobha Developers and Pheonix Group have also pushed up the average values in the region.
  • Another locality to have benefitted greatly by the metro connectivity on the same stretch as Rajaji Nagar was Yeshwanthpur in North which witnessed a slight upward movement in prices to the tune of four per cent in the Jul-Sep 2014 quarter as compared to the Apr-Jun 2014 quarter.
  • Vidyaranyapura in the North recorded a considerable hike in the last quarter and has been the highest grosser in the city in the last one year. Offering large land banks for residential development and attracting homebuyers from the Manyata Tech Park and other IT companies located in Hebbal, Vidyaranyapura is growing on the back of positive buyer sentiments.
  • The preference for the location is also fueled due to its affordable prices in comparison to nearby areas such as Jalahalli and Sahakara Nagar. The prices in Vidyaranyapura are almost Rs 200- Rs 700 per sq ft lower than these areas. For the same reason, Sahakara Nagar recorded a dip of seven per cent in the Jul-Sep 2014 quarter. Also, with several new launches taking place and many other ongoing projects nearing completion by the end of 2014 in Vidyaranyapura, both investors and end-users found suitable options to choose from.
  • The widening of the Bellary Road is expected to improve the approach of Vidyaranyapura and therefore acted as an additional factor for attracting end-users here.
  • Mysore Road recorded a seven per cent rise in capital values of residential apartments and a 17 per cent rise in values of land in this quarter. In a span of one year, the land values went up by 36 per cent on this stretch. The construction of the Bangalore-Mysore Industrial Corridor (NICE Ring Road) and the growth of industries along the stretch attracted several investors to this location. The proposed Metro connectivity too had a positive impact on investor sentiments leading to a consistent rise in property values.
  • Kengeri, located on the peripheries of Mysore Road benefitted on the same account. Both apartment and land values went up by three per cent each in the Jul-Sep 2014 quarter.

"Vidyaranyapura in North and Rajaji Nagar in West offered highest quarter-on-quarter ROI. The capital values spiked by 23%-24% in the Jul-Sep 2014 quarter."

  • Though the areas near Devanahalli International Airport recorded stable prices for apartments in the current quarter, the land values continued to rise exponentially. Even Devanahalli Road recorded a 45 per cent hike in land values in the last one year.
  • The International Airport, the proposed Information Technology and Investment Region (ITIR) and other infrastructure developments such as the elevated road from Hebbal Flyover to the Trumpet Intersection and the high-speed rail link kept investor sentiments high in Devanahalli and Doddaballapur corridors.
  • While land prices dropped by 32 per cent in this quarter in Yelahanka, apartment prices dropped by 11 per cent. With majority investors focusing on Devanahalli for better scope of Return on Investments (ROI) along with affordable values, Yelahanka continued to lose its buyers to Devanahalli.
  • Hennur Road continued to record marginal quarter-on-quarter growth in capital values and year-on-year growth in rental values due to steady demand from the professionals working in Manyata Tech Park and other IT companies located in East Bangalore. Well-built social infrastructure and connectivity kept the end-user preference robust here.
  • Tumkur Road in North-West also witnessed healthy appreciation of land and apartment values in the last one year. The anticipated industrial development along the Mumbai-Bangalore Industrial Corridor connecting Bangalore through Tumkur to Mumbai port has highly triggered positive investor sentiments in the region.
  • Earlier this year, Tumkur was declared as one of the five National Investment and Manufacturing Zones (NIMZs) outside the Delhi-Mumbai Industrial Corridor (DMIC). As a result, the area is expected to generate lakhs of job opportunities and therefore, emerge as a buzzing residential and commercial real estate market.
  Capital Values - Bangalore North and West
LOCALITY APR - JUN'14 JUL - SEP'14 % CHANGE
Devanahalli 2800 2800 0%
Hebbal 5900 5600 -5%
Hennur Road 4550 4650 2%
Hormavu 3400 3600 6%
Jakkur 4400 4000 -9%
Kengeri 3600 3700 3%
Malleshwaram 10350 10200 -1%
Mysore Road 3550 3800 7%
Nagavara 4850 4450 -8%
Raja Rajeshwari Nagar 3200 3400 6%
Rajaji Nagar 8000 9900 24%
Sahakara Nagar 4850 4500 -7%
Thanisandra 4300 4300 0%
Vidyaranyapura 3100 3800 23%
Yelahanka 4250 3800 -11%
Yeshwanthpur 7500 7800 4%

Rental Values - Bangalore North and West

Locality JUL - SEP'13 JUL - SEP'14 % CHANGE
Yelahanka 12 12 0%
R.T. Nagar 13 12 -8%
Hebbal 16 17 6%
Hennur Road 13 15 15%

*Values represent average capital and rental per sq ft rates


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  • Comments
  • Jacey April 14, 20161:29 am

    Many many quality points there.

    Reply
  • Carley April 14, 20162:01 am

    This is what I was looking for!

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  • Google April 29, 20175:19 pm

    Wonderful story, reckoned we could combine several unrelated information.

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