Bangalore 2018 October-December
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www.99acres.com INSITE REPORT bangalore 2018 october-December 99acres India’s No.1 Property Portal 99acres India’s No.1 Property Portal INSITE : BANGALORE 3 From CBO’s Desk The year 2018 marked the ‘settling down’ phase for Indian real estate, which had been battling with unremitting challenges ranging from political instability to colossal policy reforms. Enhanced Contents transparency in the real estate sector, courtesy RERA, helped improve buyer sentiment, which subsequently pushed demand and sales velocity up. The affordable housing sector was the biggest From CBO’s Desk Maneesh Upadhyaya Chief Business Officer beneficiary of the rebounding housing demand. 99acres.com data CBO’s perspective on current 03 showed that homes priced within Rs 60 lakh garnered more than market 99acres.com seventy percent of the demand in top eight metros. Average property prices across metros maintained status-quo with a few aberrations National Outlook in cities such as Pune, where a number of micro-markets recorded Snapshot of real estate ambience 04 price corrections on the back of meek sales. Hyderabad emerged across top 8 metro cities as one of the top performing metros with a consistent rise in home values starting April 2018. Market Indicators 05 Changes in capital rates and inventory The current year is expected to continue seeing gradual status QoQ; and rental values YoY recovery and reap returns of increased regulations in the sector. With fly-by-night developers completely Market Movers shrugged out of the market, buyers having a voice News that impacted Bangalore’s in the form of RERA and homes becoming 06 realty market in Oct-Dec 2018 affordable by the day, unit sales are expected to grow further from here. 99acres Outlook Methodology Financing crunch for builders, 07 99acres’ perspective on current however, may be a potential market The Insite Report by 99acres.com captures dark cloud. the quarterly capital trends and the annual Bangalore rental analysis of residential apartments 08 Key highlights - Bangalore’s capital in key real estate markets – Delhi NCR, Mumbai and rental market in Oct-Dec 2018 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 Oct-Dec 2018. 99acres India’s No.1 Property Portal INSITE : BANGALORE 5 MARKET INDICATORS DELHI NCR NATIONAL OUTLOOK HOME BUYING SENTIMENT KOLKATA While buyer sentiment improved manifold, sales were impacted by AHMEDABAD compliance related challenges. Homebuyers in Kolkata, for instance, waited for clarity over HIRA, and those in Delhi NCR snubbed the under-construction segment due to uncertainty over GST rates. Bangalore, Mumbai, Pune and Hyderabad continued displaying signs of realty revival. MUMBAI PROPERTY PRICES PUNE Barring Delhi NCR and Kolkata, where property prices maintained status quo, all metros registered an upward revision in property prices with Hyderabad HYDERABAD leading the charts with a two percent uptick, QoQ. The legacy built-up of inventory in Delhi NCR is likely to keep prices under check in the quarters to come. Other metro cities may see modest price hike. RENTAL LANDSCAPE The growth of the rental market continued unabatedly in Oct-Dec 2018. The BANGALORE CHENNAI Capital Values trend is likely to continue until the capital market undergoes a complete Rental Values revival. With Kolkata in the lead, all metro cities reported an uptick in average rental ‘asks’ by 2-4 percent, except Delhi NCR where average rentals Supply increased by a modest one percent due to oversupply of residential units. Increase by 2-4 percent Increase by 0-1 percent SUPPLY Status quo Though the absorption of residential units dipped, QoQ, the reduction in Decrease by 0-1 percent the inventory pile-up across cities spelt good news. New projects, although restricted, remained inclined towards affordable housing segments, accounting Decrease by 2-4 percent for over 40 percent of the total new inventory. While the country boasts of over 34,800 RERA-approved projects, the pace of registration remained a concern. * 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 Bangalore realty exhibited signs of revival with consistent uptrends in demand for affordable and mid-income housing, QoQ. North and South Bangalore, specifically Civic body proposes spike in Jedimara and Kolifarm junctions. In another the areas connected via Namma Metro, bagged maximum property enquiries and deals. Noticeably, the city roughly needs around 10-12 quarters to sell its complete property taxes move, the airport authority has planned to residential stock – a trend healthier than most Indian metros. The civic body has proposed a 25 percent construct three new access roads to the increase in taxes for residential properties and Kempegowda International Airport from With around 83 percent of ready inventory, the city has an equivalent demand for 30 percent for commercial units from the next Trumpet Flyover to ease traffic congestion. such units. However, close to three-fourth of the total housing demand in Bangalore financial year. The tax hike is anticipated to is for apartments priced within Rs 40 lakh. The supply in this budget category generate Rs 500 crore for ongoing and new Uncertainty prevails over Mekedatu stands just at a little over 50 percent of the overall housing inventory. To trim civic projects. project the demand-supply mismatch, the developer community launched the maximum Post the Central Water Commission (CWC) number of projects in the affordable housing category, resulting in a modest upward Karnataka RERA penalises defaulters approval, the fresh bout of tussle between revision to the tune of one percent in ‘ask’ rates in Oct-Dec 2018 vs. Jul-Sep 2018. The Karnataka RERA officials imposed a hefty Karnataka and Tamil Nadu over the Mekedatu The rental market narrated a happy story with consistent demand from the migrant penalty on the errant developers who had reservoir project unfolds the uncertainty of tenant community, resulting in a two percent rise in average rental values, YoY. not registered their projects under RERA. The constructing a multi-purpose dam across the Cauvery River. The project worth Rs 5,912 authority collected around Rs 8.83 crore as Factors that weighed the otherwise positive market sentiment down included the crore aims to alleviate drinking water issue penalty from builders. announcement to raise property taxes, the uncertainty over GST rates and several along with generating hydro-electricity to halts in the construction of Namma Metro Phase II. Nonetheless, the city showed meet the power needs of Bangalore. Land acquisition deals delay projects a strong comeback in terms of new launches, housing demand and sales volume Inordinate delays in acquiring land for Namma in the year 2018. The performance in the current year will depend on several Metro Phase II due to insufficient funds factors including, but not limited to, a downward revision in GST rates for under- marred market sentiment. The civic body is construction properties, progress under Pradhan Mantri Awas Yojana - Urban also struggling to acquire land for the road- (PMAY-U) in the State and the effective functioning of the RERA authority. widening project at Sarjapura Road, Trannery Road, Dinnur Main Road and Bellary Road. Price movement in key micro-markets Infrastructure projects on the cards LOCALITY AVERAGE ‘ASK’ RATE (PER SQ FT) QOQ CHANGE YOY CHANGE While there is no progress on Smart City projects, the civic body has commenced road- Whitefield 4,700-6,200 0% 6% widening work on Bannerghatta Road between Electronic City 3,500-4,600 2% 7% JP Nagar 5,200-5,600 4% 6% Yelahanka 4,200-5,400 1% 5% Hennur 5,000-6,300 0% 4% Ramamurthy Nagar 3,600-4,300 4% 6% Marathahalli 5,100-6,700 3% 5% Jayanagar 8,200-10,900 4% 9% Koramangala 9,800-10,500 -2% 4% Indira Nagar 8,500-11,400 3% 7% * 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 Affordable and RERA-registered KEY HIGHLIGHTS SUPPLY OF APARTMENTS projects continued yielding good UC RTM DEMAND UC RTM SUPPLY response in the last quarter of Property prices in Bangalore posted a marginal increase of one percent The popular housing localities of North, East and West Bangalore witnessed the year. The under-construction in Oct-Dec 2018 vs. the previous one. Varthur in East Bangalore and the maximum housing unit launches in the quarter. Affordable housing segment, however, was badly hit in Sahakara Nagar in North Bangalore topped the charts with five percent remained the prime choice of both buyers and developers. Of the total the quarter amidst the uncertainty in spike in ‘ask’ rates, each, QoQ. new launches in Bangalore, 40 percent belonged to the Rs 30-60 lakh the revision of GST rates. Category A price bucket. Despite majority developers focussing on launching low- Bangalore South saw an increment of two percent in average developers launched 1BHK housing cost housing units, the city displayed a whopping 21 percent shortfall in 90% / 10% 88% / 12% property prices. Housing pockets such as Gottigere, Jayanagar, Begur, units for the first time to revive the the supply of units priced up to Rs 40 lakh. On the contrary, the premium JP Nagar, Banashankari and Basavangudi saw home prices scaling up buying sentiment in the upcoming housing segment including homes priced within Rs 1-2 crore and above by four percent, each, QoQ.