Bangalore 2019 April-June
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www.99acres.com INSITE REPORT bangalore 2019 April-June 99acres India’s No.1 Property Portal 99acres India’s No.1 Property Portal INSITE : BANGALORE 3 From CBO’s Desk While the market showed some green shoots of recovery in the form of improved enquiries and sales volume this quarter, new project launches took a backseat owing to General Elections. The affordable Contents and mid-income housing segments strengthened amidst government initiatives and developers’ realignment of product-mix. The average weighted prices of residential apartments across the top eight From CBO’s Desk Maneesh Upadhyaya Chief Business Officer metros witnessed slight variations. Hyderabad and Bangalore, yet CBO’s perspective on current 03 again, emerged as the only two metros posting growth in property market 99acres.com ‘asks’, albeit by a marginal one percent, each, QoQ. National Outlook After several quarters, the demand for under-construction properties 04 Snapshot of real estate ambience in Pune, Hyderabad and Ahmedabad grew by 3-5 percent, each. across top 8 metro cities Interestingly, 80 percent of this demand is for units priced within Rs 60 lakh. Supply of new and resale apartments also improved by Market Indicators 1-3 percent each in Bangalore, Chennai, Hyderabad and Ahmedabad. 05 Changes in capital rates and inventory The demand-supply equation in various budget categories still status QoQ; and rental values YoY remains disproportionate. Delhi NCR, Bangalore and Mumbai cumulatively report a 50 percent shortfall of houses in the Market Movers affordable and mid-housing segments. News that impacted Bangalore’s 06 realty market in Apr-Jun 2019 The industry now awaits inclusion of Input Tax Credit (ITC) in Goods and Services 99acres Outlook Tax (GST) bracket, further cuts in repo Methodology rate to improve home-ownership 07 99acres’ perspective on current market The Insite Report by 99acres.com captures appetite and reduction in unsold inventory, which currently the quarterly capital trends and the annual stands at around 8 lakh Bangalore rental analysis of residential apartments 08 Key highlights - Bangalore’s capital in key real estate markets – Delhi NCR, Mumbai in top eight metros. and rental market in Apr-Jun 2019 Metropolitan Region (MMR), Bangalore, Pune, Chennai, Hyderabad, Kolkata and Annexures Ahmedabad. In order to assess the prevailing 10 sentiment, the report delves deep into demand and supply of properties across varied budget segments and occupancy stages. While demand is a function of queries received, supply is based on property listings posted on 99acres.com in Apr-Jun 2019. 99acres India’s No.1 Property Portal INSITE : BANGALORE 5 MARKET INDICATORS DELHI NCR NATIONAL OUTLOOK HOME BUYING SENTIMENT KOLKATA Reduced GST rates coupled with stabilised property prices across metros AHMEDABAD kept home buying sentiment buoyant in Apr-Jun 2019. Low-cost housing units ruled the roost and properties priced within Rs 50 lakh posted maximum enquiries and sales conversion. Demand for under-construction units improved as States undertook stringent actions under RERA. MUMBAI PROPERTY PRICES PUNE Average weighted property prices remained under pressure despite improvement in sales volume. Barring Hyderabad and Bangalore, which HYDERABAD reported a marginal one percent uptick in property prices, each, all metros saw prices maintaining status quo, QoQ. The market remained marred by the uncertainty posed by the ongoing General Elections and piling housing stock. RENTAL LANDSCAPE For yet another quarter, the rental market continued to benefit due to the BANGALORE CHENNAI Capital Values cautious buyer stance. With a four percent hike in average rentals, YoY, the Rental Values IT/ITeS-driven cities - Pune and Hyderabad, emerged as the top performers on the rental graph. Other cities averaged at a 2-3 percent uptick in rental Supply ‘asks’ in Apr-Jun 2019 vis-à-vis the same quarter last year. Increase by 2-4 percent Increase by 0-1 percent SUPPLY Status quo General Elections, liquidity crunch following the NBFC crisis and ambiguities Decrease by 0-1 percent pertaining to Input Tax Credit (ITC) under the revised GST regime kept new supply under stress. Developers’ focus on offloading existing stock led to a Decrease by 2-4 percent reduction in the total saleable stock across cities. The average time to offload residential inventory, as in Apr-Jun 2019, stands at around 30 months. * Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com 99acres India’s No.1 Property Portal INSITE : BANGALORE 7 99ACRES OUTLOOK Market Movers Property values in Bangalore reported a marginal one percent increase in Apr-Jun 2019 vs the previous quarter. The ongoing water crisis, and inordinate Over 900 RERA projects miss trash bins, digital information boards, and delays in metro land acquisition deals and completion of RERA-approved projects completion deadlines light-controlled crossing for pedestrians. impaired the market sentiment. Nevertheless, residential and commercial owners welcomed the announcement of unchanged property tax rates. About 948 real estate projects registered Also, elevated corridors covering about under RERA have missed their completion 88 km and 500 raised crosswalks at over Owing to the General Elections and the revised GST regime, the city witnessed a deadlines, severely marring the market 300 locations will be constructed across dip in the new launches in the studied quarter vis-à-vis Jan-Mar 2019. The demand sentiment. Developers of about 220 projects Bangalore to prevent accidents and reduce for the under-construction units also remained stagnant. On the supply side, have applied for an extension. The regulatory traffic congestion. Category A developers launched a few projects in the mid to premium segment, i.e. body has planned to serve notices to the Rs 60 lakh – Rs 1 crore. The quarter also saw a few re-launches in compliance with defaulters, who have failed to update the State proposes a five-year ban on RERA and building norms such as rainwater harvesting systems. information online. high-rise constructions The acute water shortage has led the State to Followed by a few micro-markets in East, North Bangalore witnessed the propose a five-year ban on the construction Namma Metro Phase 2 progresses maximum number of new project launches, enquiries and price appreciation. Price of high-rise buildings. In another move, in full swing competitiveness, improving metro connectivity and rise in large-scale commercial the water board has decided to reduce the After acquiring 1.05 lakh sq m of land developments contributed to the said growth. Buyer enquiries reported a clear Cauvery water supply for the residential from National Highways Authority of India inclination towards 2 BHK and 3 BHK units. Among all localities, Sarjapur Road in properties, which do not comply with (NHAI), the metro authority has issued land the East bagged the maximum number of site visits for 3 BHK housing units. acquisition notices to property owners for rainwater harvesting and sewage 36.3 km-long KR Puram – Kempegowda treatment system. Affordable homes still hold one-third share of the total demand. Supply in the International Airport metro corridor. In category, however, outweighs its demand by 20 percent. Resultantly, the city has addition, financial aid, worth Rs 2,255.14 crore, an inventory overhang of around 70,000 units. Hoping for high sales in the ensuing has accelerated the tunnelling work on the quarters, developers have rolled out attractive offers such as subvention schemes. 14 km-long underground stretch between Dairy Circle and Nagawara. Price movement in key micro-markets Infrastructure projects in the pipeline LOCALITY AVERAGE ‘ASK’ RATE (PER SQ FT) QOQ CHANGE YOY CHANGE The civic body has planned to equip 20 roads with features such as smart Whitefield 4,800-6,400 2% 4% signalling, intelligent parking systems, smart Electronic City 3,600-4,800 0% 4% JP Nagar 5,500-5,700 0% 7% Yelahanka 5,200-5,400 -1% 0% Hennur 4,800-6,200 3% 2% Marathahalli 4,900-6,500 -2% 3% Bellandur 5,100-6,500 0% 3% Kaggadasapura 3,900-4,600 -1% 3% Uttarahalli 3,700-4,500 -1% 0% Raja Rajeshwari Nagar 4,000-4,800 2% 3% * Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter 99acres India’s No.1 Property Portal INSITE : BANGALORE 9 BANGALORE Various infrastructure projects and KEY HIGHLIGHTS SUPPLY OF APARTMENTS expanding metro connectivity along UC RTM DEMAND UC RTM SUPPLY with the reduction in GST and home Bangalore’s realty recorded steady growth in the wake of new Localities such as Vidyaranyapura, Sahakara Nagar, Hegde Nagar and Sanjay loan rates helped the residential launches and consistent housing demand. Property prices, however, Nagar in the North; and Basavangudi, HSR Layout and Singasandra in the landscape of Bangalore to recover in remained under pressure. Sarjapur Road and Kadugodi bagged the East witnessed the maximum price appreciation to the tune of four percent, the second quarter of 2019, although maximum sale conversions on account of competitive prices, robust QoQ. The average capital values in JP Nagar remained stagnant in the studied marginally. Overall, the average social infrastructure and fresh inventory. quarter but bagged a seven percent growth, YoY, and currently stand around Rs 5,690 per sq ft. weighted capital values registered 92% / 8% North and East Bangalore witnessed maximum new project launches a minimal hike of one percent in 92% / 8% and sale queries, especially in Jakkur, Thanisandra, Hennur Road, The popular micro-markets of Whitefield, HSR Layout and Bellandur continued Apr-Jun 2019 vis-à-vis the quarter Varthur, Kadugodi, Marathahalli and Sarjapur Road. While proximity to witness price appreciation by 2-4 percent, QoQ, despite restrictions ending March 2019. The rental to the airport, SEZs and the Outer Ring Road (ORR) kept the northern imposed on Cauvery water supply.