- The residential market of Bangalore recorded a dip in site visits, enquiries, project registrations and sales amid the catastrophic second wave of COVID-19.
- Developers refrained from launching new residential projects, and the city witnessed a dip in supply by about 70 percent, QoQ.
- Only 15 new residential projects, majorly new phases of existing projects, were registered under K-RERA. Out of total new launches, the southern zone bagged about 50 percent of the total share.
- The demand for plotted developments within Rs 1 crore remained high amongst price-sensitive buyers. The city also saw an upsurge in enquiries for bigger homes, such as 3 BHK units and villas, to meet the demands of work-from-home culture.
- Developers offered various discounts and schemes, such as 20:80 payment plan, flexible booking amount, zero cancellation fee, free car parking/interiors, and EMI waivers, to attract potential buyers. However, the city saw a record dip in sales volume in Apr-Jun 2021.
- The residential rental market continued to remain grim and recorded de-growth by three percent, YoY, due to high vacancy levels amid the second wave of COVID-19.
* Supply is basis properties listed on 99acres.com * Demand is basis queries received on 99acres.com
The residential real estate in Bangalore came to a standstill in Apr-Jun 2021 as the rise in COVID-19 cases forced homebuyers to defer their home purchase plans. Site visits plummeted drastically due to the restriction of movement amid lockdown till mid-June.
Fear of delay in the completion of ongoing projects resulted in a steady demand for ready homes, especially resale units. Developers concentrated on attracting potential buyers in ready and under-construction segments by offering various discounts and schemes, such as 20:80 payment plan, flexible booking amount, zero cancellation fee, free car parking/interiors, and EMI waivers. These incentives did little to attract the homebuyers, who placed survival over buying a home, and the city recorded a slump in sales volume this quarter.
The closure of sub-registrar offices during lockdown led to a decline in property registrations in the city. Only 15 new projects were registered under Karnataka Real Estate Regulation and Development (RERA) Act (K-RERA) in the studied period. With restricted cash flows and delay in project registrations, developers curtailed new residential launches in Q2 2021.
The State permitted in-situ construction; however, cash-strapped developers struggled with rising construction and raw material costs. With majority of the developers working with half of the workforce, projects are expected to see inordinate delays. Further, the uncertainty around the peak of COVID-19 pandemic and the anticipation of the third wave kept the homebuyers from finalising deals.
Key micro-markets across budget segments
|Key micromarkets||Average Capital 'Asks'||Average Rental 'Asks'||Rental Yield|
|Within Rs 40 lakh||Ramamurthy Nagar||4,000-4,600||14||3.91%|
|Rs 40 lakh - Rs 1 crore||KR Puram||3,900-5,200||14||3.50%|
|Rs 1 crore and above||Whitefield||5,100-6,600||18||3.52%|
* Note: Rental Yield has been calculated for a 1,000 sq ft apartment. **Average property prices and rental rates have been calculated as per listings posted on 99acres.com in the studied quarter. ***The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments