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BANGALORE RESIDENTIAL MARKET UPDATE JULY - SEPTEMBER 2020

Market Sentiment WHAT’S INSIDE?

• Impact of COVID-19 on Indian Real Estate • National Outlook Snapshot of real estate ambience across top 8 metro cities • Market Movers News that impacted ’s realty market in Jul-Sep 2020 • Commercial real estate outlook • Residential demand and supply dynamics • 99acres’ Outlook Our perspective on the current market sentiment • Key trends in the buying and renting landscape • Price trends across key micro-markets

FROM CBO’S DESK

The Jul-Sep 2020 quarter set the pace for the recovery of Indian developers have further fueled the penchant for ready or near-ready residential real estate market. Post an initial lull in sales and new housing units. There seems to be a newfound demand for independent launches in the previous quarter, the current quarter came as a breather houses and builder floors, which offer increased privacy and scope for as sales resurged by almost 2.5 times of the pre-COVID levels. Both Delhi social distancing, as opposed to residential apartments. NCR and Mumbai saw a significant improvement in transactions, QoQ, as end-users flocked to leverage the lucrative deals floating in the market. A gradual improvement in the realty market was also evident from the Price correction, unlike anticipated, remained a far cry; however, with owner listings posted on 99acres, which went up by seven percent against a negotiation window of up to 10-15 percent, the deals closed in at a the pre-COVID times. Buyer responses also reported a 30 percent surge in reduced price of 2-5 percent of the pre-COVID levels. the same time period.

New launches went up, QoQ, but remained lower than the previous year. On the policy framework front, a fiscal stimulus of Rs 10,000 crore for Majority of the developers focused on completing the ongoing projects, Maneesh Upadhyaya stuck realty projects, along with the sustenance of Repo Rate at four which were stuck during the nationwide lockdown. While work on Chief Business Officer percent, an all-time low, are likely to push the market towards a revival almost all housing projects resumed in the current quarter, a lot of them 99acres.com in the ensuing quarters. The upcoming festive season may see a further continue to face delays spanning quarters. Liquidity constraints with the improvement in the absorption of residential units, across cities. COVID-19 AND REAL ESTATE NATIONAL OUTLOOK

IMPACT ON HOMEBUYERS IMPACT ON INDUSTRY HOME BUYING SENTIMENT PROPERTY PRICES

After an initial set back amid pay cuts Even as supply chain reopened in Home buying sentiment improved The resale segment remained under and job losses, homebuyers were seen Jul-Sep 2020, a ban on Chinese imports as public sector banks and private pressure with deals closing at a returning to the market in Jul-Sep 2020. impacted the cost of development in players slashed home loan interest 2-5 percent discounted rate on average. Reduced home loan rates, sweetened the realty landscape. Developers cited rates to a 15-year low. This, along Developers also kept new unit prices deals by developers and more scope of increased expenses, and thus, little with resumption of construction unchanged even as some spoke of negotiations in the resale segment were scope to reduce prices in the primary work, helped take the enquiries up by increased costs amid a ban on Chinese seen as the key drivers. The quarter market. Yet, in a bid to offload the 80 percent of the pre-COVID times. imports. However, initial speculations of continued witnessing the popularity existing inventory, several schemes Developers reported a 50 percent hefty price corrections did not hold true of ready housing units, and improved were introduced in the quarter. recovery in the number of transactions. for either of the segments. demand for independent houses and Digital transformation continued as builder floors in most metro cities. developers took to the online medium RENTAL LANDSCAPE SUPPLY Window shoppers exited and genuine to interact with potential homebuyers Rental market remained in doldrums With an addition of over 31,000 units homebuyers were seen leveraging at various stages of the buying cycle. despite the opening up of the in metro cities, new launches went up the discounts available in the market. Several governmental procedures nationwide lockdown. Tenants avoided by 4.5 times, QoQ. The resale segment, Noticeably, the quarter reported shifted online as organisations adopted moving as the majority of offices too, reported an improvement as renewed interest from the NRI homebuyer to the new normal. The infusion of continued with the work-from-home several property owners returned to community against the backdrop of Rs 10,000 crore to aid the completion model. Resultantly, the rental rates the market after lockdown restrictions depreciating rupee and attractive deals of stuck realty projects was hailed by did not see any movement and offtake were gradually lifted. Unsold inventory in the new home category. the industry. was meek in both residential and stood at 4.40 lakh units at the end of commercial segments. September 2020.

KOLKATA 1% DELHI NCR CHENNAI 3% 1% SHARE OF NEW LAUNCHES AHMEDABAD 16% MUMBAI The quarter witnessed the launch of about 240 new residential projects in top eight metro cities. Despite being 25% severely hit by the Coronavirus pandemic, Mumbai led all cities with a 25 percent share in new and re-launched projects. Pune, Hyderabad, Bangalore and Ahmedabad followed suit with a 16-19 percent share, each. Delhi NCR made a meagre three percent share of the total new launches, with a few projects in Greater Noida, Ghaziabad and Gurgaon. BANGALORE Kolkata and Chennai reported minimal new activity from developers. 17%

PUNE 19% Note: The data depicts share of new launches across metro cities in the studied quarter The numbers include re-launched projects HYDERABAD 18% BANGALORE’S REALTY AT A GLANCE Property Prices Rental Rates Demand Supply

BUDGET-WISE DEMAND AND SUPPLY Key micro-markets across budget segments

Budget Localities based on Average Average Rental Jul-Sep 2020 Range Consumer Demand and Property Prices Rental ‘Asks’ Yield 8% Active Listings (Rs per sq ft) (Rs per sq ft/month)

Within Rs 40 lakh 3,200-4,000 13 4.17% Hormavu 3,900-4,800 15 3.83%

Rs 40 lakh - Rs 1 crore Whitefield 4,900-6,400 19 3.68% 9% -17% 4,800-5,900 15 3.59% KR Puram 4,100-4,800 15 3.78%

Rs 1 crore and above Hebbal 5,500-7,900 18 2.78% 5,200-6,500 21 3.90% Demand 5,500-6,700 18 3.23% 35% 18%0% 42% 50% 23% 32% Supply Note: Rental Yield has been calculated for a 1,000 sq ft apartment. Within Rs 40 lakh Rs 40 lakh - Rs 1 crore Rs 1 crore and above 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.

BHK-WISE DEMAND AND SUPPLY Key micro-markets across BHK-configurations

Configuration Localities based on Average Average Jul-Sep 2020 Consumer Demand and Unit Size Property Prices 1% Active Listings (Sq ft) (Rs per sq ft)

1 BHK BTM Layout 500-520 5,000-6,000 Rajaji Nagar 500-580 10,000-13,000 2 BHK 850-980 3,700-4,900 -7% 1,000-1,180 7,700-10,700 9% 1,100-1,150 9,100-10,500 3 BHK 1,350-1,380 4,000-4,600 Harlur 1,600-1,630 6,000-7,000 Demand -3% 1,250-1,300 4,500-4,700 19% 28%0% 45% 46% 30% 23% 6% 3% Supply Note: Average property prices and rental rates have been calculated as per listings posted on 99acres.com in 1BHK 2BHK 3BHK 4BHK the studied quarter. The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments.

Note: Supply is basis properties listed on 99acres.com in the studied quarter. Demand is basis queries received on 99acres.com in the studied quarter. INSITE : BANGALORE 7 MARKET MOVERS COMMERCIAL REAL ESTATE OUTLOOK government Metro projects back on clears land usage bills track • A total of 4.3 million sq ft of new • Khaitan & Co. law firm leased The State cleared Bangalore The trials on 6.4 km-long Grade A office supply was added to 15,700 sq ft of office space in Development Authority (Amendment) Yelachenahalli- metro Bangalore’s commercial landscape WeWork centre at Embassy Quest. Bill, 2020 and Karnataka Town and line were completed, and the line in Q3 2020. • Ola Technologies to lease over Country Planning (Third Amendment) is likely to commence operations • Gross office space leasing recorded 4.25 lakh of office space in Bill, 2020. The former bill will enable from November 2020. The tunnelling a 50 percent improvement, QoQ, Prestige Startech in Koramangala. owners of illegal properties to work on the longest underground and stood at 2.72 million sq ft in regularise their homes by paying metro corridor between Cantonment • Amazon leased nine lakh sq ft Q3 2020. a penalty of 10-50 percent of the Station and Shivajinagar Station of office space in Bagmane Rio Guidance Value as per the property has been started. The completion • The vacancy rate in the city stood at Business Park. size. The latter will allow developers to deadline for all metro corridors 8.01 percent, up from 5.89 percent • Godrej FM bought land parcel register sites in a phased manner. under Phase 2 is set for 2024 to ease in Q3 2019. worth Rs 700 crore from Century the traffic movement in the city. • Apple leased about four lakh sq ft of Group for a commercial project in commercial space at Prestige Minsk North Bangalore. Square. The annual rent is set at Rs 82 crore.

K-RERA takes action against Spike in building plan defaulters approval fees Karnataka RERA issued about The State civic body has planned 400 recovery warrants in the last to increase the fee for sanctioning 1.5 years against errant developers building plan for residential, for dishonouring its judgements of commercial, and industrial offering compensation to homebuyers. structures. The fee for building plan The authority also imposed penalties approval will now be 0.5 percent per up to Rs 20,000 per month on those sq metre of the Guidance Value of builders who have delayed submission the land. of quarterly and annual updates.

acres India’s No.1 Property Portal ZONAL SHARE OF acres West Bangalore India’s No.1 Property Portal 10% East Bangalore NEW LAUNCHES 20%

The IT/ITeS hub of South Bangalore captured the largest share of 99ACRES’ OUTLOOK new residential launches, i.e. 45 percent, in Jul-Sep 2020. North Bangalore, driven by the emerging The residential market of Bangalore minimum of 12-15 months to dispose of IT/ITeS market and the proximity to recorded modest signs of recovery in the current residential stock. Kempegowda Internatinal Airport Jul-Sep 2020. The relaxation in lockdown remained the next most popular zone led to a healthy rise in the site-visits Furthermore, the demand for land North amongst buyers and developers. South this quarter. However, the unstable job parcels remained upbeat in areas such as Bangalore Bangalore market continued to dampen the sales 25% Devanahalli, , Sarjapur Road, 45% Note: The data depicts share of new launches volume. Despite the ongoing slowdown, Attibelle and Hoskote. The average price across zones in Bangalore in the studied quarter. builders remained reluctant to offer for this property type stood between discounts, which kept the residential Rs 25 lakh and Rs 1.2 crore. Many property prices unaltered, QoQ. developers, such as Sobha Ltd, Shriram Properties Ltd, Provident Housing, Due to market instability, most of the Salarpuria Sattva Group and Century Real developers deferred their plans to Estate Holdings Pvt Ltd., ventured into launch residential projects to the next plotted developments this quarter. RENTAL quarter. Among the new launches, South Bangalore clocked about 50 percent of The developer community have high LANDSCAPE the total launches in the city. hopes of sales revival from the upcoming festive season. Many Category A With subdued sales and restricted developers have also planned residential Key micro-markets based on consumer demand and active listings launches, unsold inventory stood launches during Oct-Dec 2020. They may Localities Most Supplied Market Rental Rates YoY % at about 75,000 units at the end of also launch attractive offers and rebates Rental Units Share (Rs per Month) Change in Jul-Sep 2020. The city will take a to attract homebuyers. Rental ‘Asks’

Whitefield 2BHK 40% 16,000-20,000 0% 3BHK 35% 22,000-28,000

Thanisandra 2BHK 44% 15,000-19,000 1% 3BHK 43% 17,000-24,000

Marathahalli 1BHK 41% 12,000-14,000 3% 2BHK 35% 17,000-22,000

Electronic City 2BHK 68% 11,000-15,000 1% 1BHK 28% 6,000-9,000

Rajaji Nagar 3BHK 46% 40,000-50,000 9% 2BHK 35% 34,000-46,000

Note: Average rental rates and supply have been calculated as per listings posted on 99acres.com in the studied quarter. Key micro-markets have been selected based on expressions of interest raised on 99acres.com in the studied quarter.

INSITE : BANGALORE 11 KEY HIGHLIGHTS CONCLUDING REMARKS

The Jul-Sep 2020 quarter saw an uptick in site-visits for both The reduction in stamp duty charges by two percent for new and resale markets. However, there was limited resale properties priced within Rs 21-35 lakh, all-time low home inventory available as the owners exited the market in loan interest rates and the proposed reduction in Guidance anticipation of an improvement in housing demand. On the Value may revive the home buying sentiment in the ensuing other hand, builders tried attracting buyers using a variety quarters. Majority of the new residential launches are planned of freebies, including the EMI-holiday scheme. by Category A builders in the next 1-2 quarters. Struggling with

While 70 percent of the demand lies for ready or nearing inventory overhang, small and mid-sized builders may defer new completion inventory priced within Rs 50-75 lakh in projects by a few quarters. Developers may introduce attractive Bangalore, there is an unmet supply of 30 percent. The discounts and new inventory at a competitive price to improve city recorded new inventory within Rs 55-75 lakh. the realty sentiment in the festive season.

East and North Bangalore saw maximum sale enquiries within the range of Rs 55-75 lakh. , Panathur, Yelahanka, , Hennur, KR Puram and Sarjapur Road remained popular residential hotspots.

After sluggish demand over the last few quarters, the premium housing segment, i.e. properties priced over Rs 1 crore, witnessed a revival in sales owing to flexible payment plans and discounts of about 20 percent from the developers.

The residential rental landscape remained grim as the city was flooded with vacant homes owing to reverse migration of the working population from Bangalore. The demand for co-living spaces was also hit as students moved out of the city following the closure of colleges and institutes. The tenant community negotiated the lease terms and reduced security deposit to about 3-6 months. The landlords also discounted rental rates to attract the remaining migrant population.

INSITE : BANGALORE 13 ANNEXURES

CAPITAL VALUES RENTAL VALUES

Locality Jul-Sep 2020 Locality Jul-Sep 2020 Locality Jul-Sep 2020 Locality Jul-Sep 2020

Akshaya Nagar 5300 4550 AECS Layout 21 JP Nagar 18 Banashankari 6500 Kaggadasapura 4500 Akshaya Nagar 16 Kadubeesanahalli 21 5600 Kasavanhalli 5500 18 Kadugodi 16 Bannerghatta 5880 4150 Banashankari 18 Kaggadasapura 17 Basavangudi 10300 Koramangala 10500 Banaswadi 18 Kalyan nagar 19 Begur 4600 KR Puram 4600 Basavangudi 23 17 6600 Kudlu Gate 5450 Begur 16 Kasavanhalli 20 Benson Town 9500 6100 Bellandur 22 Kengeri 12 Billekahalli 5200 Mahadevpura 6040 Billekahalli 18 Kodihalli 20 5140 Malleshwaram 11100 Bommanahalli 18 Koramangala 28 Bommasandra 3600 Marathahalli 6300 Bommasandra 13 KR Puram 15 6200 Nagarbhavi 4600 Brookefield 21 Kumaraswami Layout 13 BTM Layout 5800 Nagavara 6050 BTM Layout 19 Kundalahalli 21 Budigere 5300 Panathur 6200 Cooke Town 23 Mahadevpura 20 Cooke Town 9500 Raja Rajeshwari Nagar 5050 Cox Town 25 Malleshwaram 26 CV Raman Nagar 6500 Rajaji Nagar 12700 CV Raman Nagar 18 Marathahalli 21 Devanahalli 5280 4400 Doddanekundi 19 16 Electronic City 4800 RT Nagar 5900 Doddathoguru 16 20 Frazer Town 9100 5950 27 Nagarbhavi 15 4600 Sanjay nagar 7300 Electronic City 16 Nagavara 17 Gunjur 4600 Singasandra 4400 Frazer Town 24 New Thippasandra 21 Harlur 6600 Subramanyapura 5050 Gottigere 13 Panathur 21 Hebbal 7550 TC Palaya 4800 HBR Layout 19 R.T. Nagar 16 Hegde Nagar 5500 Thanisandra 6100 Hebbal 18 Raja Rajeshwari Nagar 12 Hennur 5600 4650 Hennur 19 Rajaji Nagar 23 6170 Varthur 5050 Hoodi 19 Ramamurthy Nagar 15 Agara 4500 5120 Horamavu Agara 16 29 Hormavu 4700 Vijayanagar 6010 Hormavu 15 Sahakara Nagar 17 HSR Layout 6010 Whitefield 6200 HSR Layout 21 Sarjapur 18 5700 Yelahanka 5010 Hulimavu 16 Singasandra 15 Indira Nagar 10500 Yeshwanthpur 7250 Indira Nagar 26 Subramanyapura 13 6010 ITPL 20 TC Palaya 14 5650 Jakkur 15 Thanisandra 17 Jayanagar 10740 Jalahalli 17 29 JP Nagar 5910 Jayanagar 22

*All prices are per sq ft rates *All prices are per sq ft rates INSITE : BANGALORE 15 METHODOLOGY

The Insite Report by 99acres.com properties across varied budget captures the trends in the capital segments and BHK configurations. and rental markets across top The report also gives insight into eight metro cities – Delhi NCR, the key micro-markets based on Mumbai Metropolitan Region consumer demand and active listings (MMR), Bangalore, Pune, Chennai, in the rental market. While demand is Hyderabad, Kolkata and Ahmedabad. a function of expressions of interest In order to assess the prevailing raised on 99acres.com, supply is sentiment, the report delves based on property listings posted on FINDdeep into BEST demand OPTIONS and supply TO of 99acres.com in Jul-Sep 2020. U SELL RENT PRPERT

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