www.99acres.com INSITE REPORT bangalore 2018 April - June 99acres India’s No.1 Property Portal 99acres India’s No.1 Property Portal INSITE : BANGALORE 3 CBO’s Desk The positive impact of groundbreaking policy reforms - Real Estate (Regulation and Development) Act and Goods and Services Tax (GST) – is seeming to bear some fruit in FY 2018- Contents 2019. Marked by a gradual reduction in unsold inventory, a rise in enquiries in affordable housing segment and the return of new launches, the beginning of the fiscal year is hinting From CBO’s Desk Maneesh Upadhyaya Chief Business Officer towards a slow but steady revival. 03 CBO’s perspective on current market 99acres.com The quarter recorded a quantum jump of almost 50 per cent in new residential launches to reach 50,100 units. Affordable National Outlook housing led the supply graph, up by about 100 per cent, QoQ, in 04 Snapshot of real estate ambience Pune, Hyderabad, Delhi NCR, Chennai, Mumbai Metropolitan across top 8 metro cities Region, Bangalore and Kolkata. Inventory levels, on the other hand, dropped by 10-30 per cent, YoY, across metros. RERA- Market Indicators approved projects commanded a significant share of the 05 Changes in capital rates and inventory residential demand, evident from a healthy upswing status QoQ; and rental values YoY in the timeshare on RERA-registered projects on 99acres.com. Realty stakeholders are gung-ho Market Movers about the upcoming festive quarter, which News that impacted Bangalore’s might see a resurgence in end-user 06 realty market in Apr-Jun 2018 demand and sales volume. 99acres Outlook Methodology 07 99acres’ perspective on current market The Insite Report by 99acres.com captures 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 Apr-Jun 2018 Metropolitan Region (MMR), Bangalore, Pune, Chennai, Hyderabad, Kolkata and Annexures Ahmedabad. In order to assess the prevailing sentiment, the report delves deep into demand 10 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 2018. 99acres India’s No.1 Property Portal INSITE : BANGALORE 5 MARKET INDICATORS Capital Values Rental Values Supply Bangalore ˄ ˄ ˅ Delhi NCR ˄ Mumbai ˄ ˄ ˅ Chennai ˄ ˅ Pune ˄ ˅ Hyderabad ˄ ˄ ˅ Kolkata ˄ Ahmedabad ˄ ˄ ˄ * Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com NATIONAL OUTLOOK HOME BUYING SENTIMENT IN FOCUS The realty landscape witnessed a fleeting calm even as enquiries and sales recorded a slight uptick in most metro cities this quarter. While the RERA ANNIVERSARY non-formation of a RERA-body marred buyer sentiment in Kolkata and Hyderabad, the approaching ‘Aadi’ period slackened growth in Bangalore and May 1, 2018 marked the first anniversary of the Real Estate (Regulation and Development) Act, 2016 Chennai. A revival in property sales is expected in the festive quarter. [RERA]. The implementation progress varied from State to State depending on timely compliance with Central RERA rules. Kerala, West Bengal and the six north-eastern States are yet to implement the Act. Others including Karnataka, the NCT of Delhi and Tamil Nadu made snail-paced progress, tarnishing PROPERTY PRICES consumer sentiment. Price movement remained marginal across cities, except Hyderabad, which saw notable growth due to infrastructural overhaul and robust office-space absorption. The premium segment remained passive as affordable housing GENERAL BUYING SENTIMENT grabbed a majority share of buyer demand. Any significant deviation in Buyer confidence ameliorated for RERA-approved projects. A resurgence of fence-sitters in select pockets, average weighted capital ‘asks’ is likely to happen around Oct-Dec 2018. driven by connectivity and job opportunities, was a testimony to the reviving market. Conversion rate improved, albeit minimal. The affordable housing sector garnered maximum buyer interest, however, RERA registration alone did not suffice to drive buyers towards under-construction properties. RENTAL LANDSCAPE The rental landscape continued to remain upbeat for the seventh consecutive quarter. Rental values witnessed a notable hike across cities, PROPERTY PRICES except Delhi NCR and Pune where a pile-up of ready inventory inflicted the Enquiries resurfaced and led several housing pockets register an uptick in property prices. While market. The growth is likely to continue for a few more quarters, until home Hyderabad reported a notable rise in residential property rates, Pune and Chennai maintained status quo. buying picks up pace and sees a complete revival. Delhi NCR and Mumbai reported a price correction in the last one year due to discounts offered by developers to lure buyers back into the market. SUPPLY The hiatus in new launches amidst piling residential stock helped cities such as NEW LAUNCHES Bangalore, Mumbai, Pune, Chennai and Hyderabad rationalise inventory levels. New launches nose-dived across cities due to increased compliance under RERA. Chennai, Hyderabad and Slow-paced registrations under RERA played a key role in curtailing the saleable Kolkata reported a 50-70 percent dip in launches, YoY, largely owing to delayed notification of RERA rules. primary stock. The trend is expected to continue as no exceptional measures Delhi NCR, Mumbai, Bangalore and Pune, too, witnessed new launches coming to halt. A year later, the are being observed to fast-track RERA registrations. markets seem to have gained ground with new launches reporting an improvement, QoQ. 99acres India’s No.1 Property Portal INSITE : BANGALORE 7 99ACRES OUTLOOK Market Movers The quarter which marked the first anniversary of the most crucial reform in the real estate sector – Real Estate (Regulation and Development) Act, 2016 (RERA), Karnataka RERA mandates permanent Green Tribunal (NGT) was commissioned to saw Bangalore’s residential market reporting an increment in sales volume which approval of projects probe into the infringement of the Varthur surpassed the previous year levels by huge margins. With an outstanding unsold Starting April 2018, Karnataka RERA Lake, people continued to occupy the inventory of 70,000 units at the beginning of the quarter, the average property mandated developers to seek permanent temporary sheds around the Bellandur Lake. prices maintained status quo in Apr-Jun 2018. approvals before advertising projects. In another incident, residents moved to the A few project launches were a testimony to the actively regaining market. So far, RERA issued provisional certificates High Court against the encroachment on the Locations such as Kanakapura Road in the South and Varthur and Belathur in the to all applicants. The move has tightened the Pattandur Agrahara Lake. East witnessed large-scale project launches from Category A developers. Majority string on several developers. Bangalore has new launches were restricted to the Rs 30-60 lakh price bucket as high-end, and a huge share of projects awaiting sanction in Protests against project delays luxury landscapes continued to suffer on account of piling stock. the State. mar sentiment Inordinate delays in completing infrastructure The fast-paced commercial office space absorption and low vacancy levels Bangalore realty goes digital and residential projects got Bangalore remained Bangalore realty’s growth drivers. The rental market, too, benefitted as Post relaunching the Bangalore Development residents livid. While in one of the instances, Q1 2018 witnessed absorption of more than 1.62 lakh sq ft of office space. Increased Authority (BDA) website, the government a group of homebuyers protested against BDA transparency and accountability instilled by RERA and GST seemed to smother the has opened an online portal for payment of for missing the 2015 deadline of the Gunjur volatility in Bangalore real estate. The market is anticipated to hit a lull in the next property tax. In tandem with the E-governance Housing project, in another, residents quarter due to the ‘inauspicious’ period of Aadi (monsoon) between July and August, department, BDA is set to launch five more dissented over the two-year delay in before picking up the pace in the festive months of October and November. online services pertaining to the issuance completing the underpass at the of Occupancy Certificate, approval of plans, Hosakerehalli Cross. transfer of Khata and amalgamation and extension of BDA plots in the forthcoming quarter. Lake encroachment becomes Price Movement in Key Micro-markets ceaseless The unremitting talks on clearing lake LOCALITY AVERAGE ‘ASK’ RATE (PER SQ FT) QOQ CHANGE YOY CHANGE encroachments across Bangalore proved Whitefield 4,500 - 5,600 2% 8% futile as most water bodies faced serious environmental concerns. While the National Electronic City 3,400 - 4,500 0% 7% JP Nagar 3,700 - 6,100 -1% 0% Hennur 4,600 - 5,900 3% 0% Yelahanka 4,200 - 5,300 0% 3% Ramamurthy Nagar 3,800 - 4,400 -1% 0% Silk Board 4,000 - 5,100 0% 16% Marathahalli 4,500 - 6000 -2% 6% Kaggadasapura 3,700 - 4,400 4% 7% Raja Rajeshwari Nagar 3,500 - 4,500 1% 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 Recording a healthy uptick in demand, KEY HIGHLIGHTS SUPPLY OF APARTMENTS sales volume and supply in the UC RTM DEMAND UC RTM SUPPLY form of new launches, Bangalore’s The quarter witnessed buyers flocking towards under-construction units, Developers restricted new launches to a ticket price of Rs 60 lakh and real estate market displayed all the a segment snubbed by them since the implementation of GST last year. below owing to an oversupply of nearly 20 percent in premium housing signs of a revival. The city recorded a The come-back of ‘pre-launch’ surged enquiries for the segment. With category, across zones.