Battling the demonetisation blues, housing market in Bangalore witnessed a marginal recovery in the first half of 2017 and the trend is likely to continue post RERA implementation.
The change in economic policies and real estate practices have greatly benefitted Bengaluru residential market. Although there is minimal ebb in sale volume, the primary market of Bangalore seems to be quite stable. The demand graph is expected to grow in ready-to-move and Occupancy Certificate (OC) ready properties. Additionally, market revival is likely to get in motion after complete implementation of Real Estate (Regulation and Development) Act 2016, across the country. Buyers are delaying their investment in order to avail better security and transparency throughout the property transaction.
Demand and supply dynamics
Bangalore residential market is certain to witness supply of the new units in the forthcoming quarters. Most of the luxury launches are either in pipeline or at pre-launch stage. However, it is predicted that the capital values will be slashed by 2-5 percent. The reason behind the dip in the capital values in the secondary market is the sudden demonetisation blow that significantly impacted the housing demand bringing the entire volume of ongoing transactions came to an unexpected halt. Besides, abrupt downsizing in the IT sector also added some extra suffering.
Most of the potential buyers are on the lookout for affordable apartments with multiple facilities, casting a severe incidence on luxury real estate market. People are demanding more against limited resources. In comparison to the central business districts, luxury property demand is vastly deriving from the Secondary business districts.
Mid-income housing leads the pack
Mid-income apartments are always in the hit-list as this type of units have a typical set of buyers, the IT professionals. They mostly require apartments in close proximity from the workplace, decent infrastructure, hassle-free communication and quick access to academic and healthcare facilities at competitive prices. It has been observed that residential properties within Rs 40 -50 lacs have picked up maximum demand from the end-users.
Suburb: The new housing destination
With the new Floor Area Ratio (FAR), there’s a plodding drop in the average built-up area offered by the promoters. Thus, suburbs and peripheral areas of the city are emerging as upcoming realty hotspots. In the suburban areas, land prices are relatively lower than that of the city. Thus, scopes for budget-friendly properties with advanced infrastructure are pulling in developers’ as well as homebuyers’ interests.
Post RERA industry forecast is quite in favor of the real estate market. Bengaluru is a city known for its IT prominence and advanced infrastructure. Thus, it will not take much time for the residential market to revive in both luxury and budget residential brackets.
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