INSITE BANGALORE RESIDENTIAL MARKET UPDATE JANUARY - MARCH 2021 Market Sentiment WHAT’S INSIDE? • InFocus: Union Budget 2021-22 • National Outlook Snapshot of real estate ambience across top 8 metro cities • Market Movers News that impacted Bangalore’s realty market in Jan-Mar 2021 • 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 first quarter of 2021 witnessed a resurgence in sales volume across On the supply front, over 600 residential projects were launched in metro cities, particularly in Pune and Mumbai, amid a stamp duty cut metro cities, adding approximately 75,000 new units to the market. until March. While continued adoption of work-from-home weighed down Mumbai contributed close to 40 percent of the total new supply, rental demand and ‘asks’, it pushed the desire to own a home further up. followed by Hyderabad at 20 percent and Pune at 15 percent. Owner This subsequently brought back interested homebuyers to the market, listings posted on 99acres also went up by 20 percent in Jan-Mar 2021 who leveraged on deals and discounts rolled out by developers and against Oct-Dec 2020. home loan interest rates slashed by lending institutions. In line with the recovering market sentiment, site visits and sales, pricing power returned The green shoots of recovery seen so far will have to stand the test of to the sellers. Based on properties listed on 99acres, none of the eight time with a steep surge in COVID-19 cases and the resultant restrictions metro cities recorded a downward revision in average listing prices of in some cities may impact economic recovery, project construction Maneesh Upadhyaya residential apartments in Jan-Mar 2021 against the previous quarter. timelines and buyer site visits. Fingers crossed as we enter the new Chief Business Officer Buyer responses also reported a seven percent surge in the same period financial year. 99acres.com on 99acres. INFOCUS: UNION BUDGET 2021-22 NATIONAL OUTLOOK FOR THE HOMEBUYERS FOR THE INDUSTRY HOME BUYING SENTIMENT PROPERTY PRICES Giving a fillip to affordable The Government showed its inclination The home buying sentiment remained Property prices remained unchanged homebuyers, Union Finance Minister towards boosting affordable housing upbeat in Q1 2021, despite a fresh wave in Delhi NCR, Mumbai, Bangalore and Nirmala Sitharaman extended the time supply by proposing an extension in time of COVID-19 cases across metro cities. Pune, but inched up slightly in cities limit to avail additional tax benefits of line for developers to avail a tax holiday While site visits reduced in March 2021, like Hyderabad, Chennai, Kolkata and Rs 1.5 lakh under Section 80 (EEA) of for another year till March 31, 2022. The housing sales grew gradually. Mumbai Ahmedabad. Unsold inventory of about the Income Tax Act. The Government Union Finance Minister also granted and Pune led all metro cities in terms of 4.6 lakh units maintained a downward also announced steps towards additional tax exemptions for affordable property sales as homebuyers rushed pressure on property prices, despite a improving the civic and transport rental housing projects, which are aimed to cash in on the reduced stamp duty surge in construction costs, thus forcing infrastructure in the country. For at providing rental housing for migrant rates, a benefit valid until March 31. developers to limit profit margins. instance, under the Jal Jeevan Mission, workers. Moreover, the Government an outlay of nearly Rs 3 lakh crore was proposed to make suitable amendments RENTAL LANDSCAPE SUPPLY announced to improve water supply in the legislations regarding debt financing In line with the previous quarters, While new housing projects surged across 4,400 urban local bodies, and of Infrastructure Investment Trusts (InvITs) the rental market remained grim as across cities, QoQ, numbers remained Rs 18,000 crore were allotted for and Real Estate Investment Trusts (REITs) professionals and students continued significantly lower than a year augmenting public transport, such as by Foreign Portfolio Investors (FPIs), to operating from home. A surge in COVID ago. About 600 new projects were bus and metro networks in Tier I and ease access to finance for InvITs and REITs, cases further delayed the reopening of launched this quarter. Supply in the Tier II cities. While the Government therefore augmenting funds for the realty organisations and institutions, marring secondary market also improved as did not provide any direct benefits to sector. Apart from these inclusions, there hopes of a revival in the rental market. property owners attempted sales while homebuyers, it tabled several fiscal was no mention of key industry demands Rentals are reportedly down by 10-15 maintaining their ‘asks’ and avoiding benefits to boost the economy and such as reduction of GST slab rate or percent since last one year. massive negotiations. address unemployment at large. reintroduction of Input Tax Credit (ITC). KOLKATA 3% DELHI NCR CHENNAI 3% SHARE OF NEW LAUNCHES 4% The quarter witnessed the launch of about 600 new residential projects in top eight metro cities. Mumbai led all cities for the third quarter in a row with a 38 percent share in new and re-launched projects. Hyderabad surpassed Pune MUMBAI and took the second position with a 21 percent share. Interestingly, Delhi NCR again contributed the least with a AHMEDABAD 38% 9% three percent share in the overall new unit additions; however, it reported a 70 percent jump in new launches, QoQ. BANGALORE Bangalore, too, reported a nearly 10 percent growth in the number of new project launches in Jan-Mar 2021 vis-à-vis Oct-Dec 2020. 8% PUNE Note: The data depicts share of new launches across metro cities in the studied quarter 14% The numbers include re-launched projects HYDERABAD 21% 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 Jan-Mar 2021 Range Consumer Demand and Property Prices Rental ‘Asks’ Yield Active Listings (Rs per sq ft) (Rs per sq ft/month) 7% Within Rs 40 lakh Bommasandra 3,100-4,000 12 3.89% Kaggadasapura 3,900-4,500 16 4.18% Rs 40 lakh - Rs 1 crore Thanisandra 5,300-6,100 17 3.27% -15% 8% Yelahanka 4,700-5,700 15 3.29% Electronic City 3,700-4,900 15 3.64% Rs 1 crore and above Whitefield 4,900-6,500 19 3.52% Hebbal 5,500-7,900 17 2.22% Demand JP Nagar 4,800-6,600 18 3.40% 36% 21%0% 39% 46% 25% 33% 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 Jan-Mar 2021 Consumer Demand and Unit Size Property Prices -3% Active Listings (Sq ft) (Rs per sq ft) 2% 1 BHK Whitefield 500-600 4,900-6,500 Budigere 470-530 4,000-5,800 2 BHK Electronic City 850-1000 3,700-4,900 Thanisandra 1000-1070 5,300-6,100 KR Puram 850-1050 3,500-4,800 3 BHK Hebbal 1300-1700 3,500-4,800 1% Yelahanka 1450-1500 4,700-5,700 Demand 0% Akshaya Nagar 1400-1420 4,800-5,500 4% 4%0% 48% 45% 38% 40% 10% 11% 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 Namma Metro projects pick Ongoing civic projects to up the pace improve liveability • Office space market is expected to net leasable area of 1.65 million sq Several phases under Namma Metro Under the LED lighting see an upsurge in average lease ft worth Rs 1,441 crore at an IT park picked up pace in Jan-Mar 2021. While implementation project, Bruhat rates owing to early bookings located in Hebbal, North Bangalore. Rs 14,780 crore were allocated for the Bengaluru Mahanagara Palike for the upcoming stock and high • Byjus leased 4 lakh sq ft office space expansion of Metro in Union Budget (BBMP) has planned to replace the occupancy rates in Bangalore. along Outer Ring Road. FY 2021-22, the Central Silk Board- streetlights of the entire city. The • The retail segment saw a U-shaped Kempegowda International Airport first stage will replace about one • Higher traction recorded in flexible recovery with five new malls metro corridor got approved. The first lakh LED bulbs by July 2021. Further, workspace segment with notable planned in the city. stretch of Yelachenahalli-Silk Institute rainwater harvesting would be deals, such as The Executive on Green Line of Namma Metro Phase made mandatory under Bengaluru • Tesla marked its entry in India Centre (TEC) leased 82,000 sq ft at 2 became operational in January 2021.