BANGALORE RESIDENTIAL MARKET UPDATE · Bangalore such as Whitefield, Sarjapur Road, Hennur and...
Transcript of BANGALORE RESIDENTIAL MARKET UPDATE · Bangalore such as Whitefield, Sarjapur Road, Hennur and...
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BANGALORERESIDENTIAL MARKET UPDATE
INSITE
JULY-SEPTEMBER 2019
Market Sentiment
Maneesh Upadhyaya Chief Business Officer99acres.com
provide financing to the many stalled affordable and mid-income housing projects in the country cheered the market. The Government will contribute Rs 10,000 crore, which is anticipated to benefit around 350,000 housing units. Further, consecutive repo rate cuts and the mandate around repo rate linked home loans are seen as housing demand lifters. The impact of these policy announcements will be more evident in the ensuing festive quarters.
With the news of an impending economic slowdown clouding the market, end-user and investor activity plunged evidently in residential real estate in Jul-Sep 2019. This clubbed with multiple insolvency proceedings and the on-going financial crunch that most developers are struggling with kept overall sentiment submissive. Average weighted prices of residential apartments witnessed meager alterations quarter on quarter, barring Hyderabad and Ahmedabad. Rentals, too, grew insignificantly in the last one year. An inventory overhang of 10 lakh units along with 5.6 lakh delayed homes across the country kept price points under check. On the supply front, the top eight metros saw the launch of around 486 housing projects in Jul-Sep 2019, about 30 percent down from Apr-Jun 2019.
While the quarter did not have many laurels to talk about, the Finance Minister’s announcement regarding the creation of a special fund to
FROM CBO’S DESK
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MARKET INDICATORS
* Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com
Capital ValuesRental Values
Supply
DELHI NCR
KOLKATA
CHENNAI
HYDERABAD
BANGALORE
AHMEDABAD
MUMBAI
PUNE
NATIONAL OUTLOOK
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PROPERTY PRICES Metro cities witnessed marginal upticks in property prices. Hyderabad and Ahmedabad took lead with a two percent surge, QoQ. A few good deals in certain popular housing hubs contributed to the said price hike. The industry does not foresee any major deviations in the prices of new or ready residential stock in the ensuing quarters, too.
HOME BUYING SENTIMENT Home buying sentiment remained weak due to developer defaults and the NBFC crisis, which dried up funding and slowed the completion of already delayed projects. Around 5.6 lakh residential projects are reportedly stalled across the country. Developers, nevertheless, anticipate the festive season to lift housing demand up.
RENTAL LANDSCAPE Rental ‘asks’ grew by an average of 2-3 percent across metros, YoY. The segment is expected to benefit from the prolonged caution exercised by homebuyers. Rental hubs along transit corridors are expected to see better demand and surging ‘rates’ in the next couple of quarters. Co-living is fast emerging as a trend, especially in Bangalore, Hyderabad and Mumbai.
SUPPLY Metro cities witnessed the launch of around 486 projects in Jul-Sep 2019, a 33 percent dip versus Apr-Jun 2019. Economic slowdown and liquidity crunch forced builders to hold back new launches. Government’s efforts to boost the Public Sector Banks and NBFCs by injecting funds worth Rs 1 lakh crore may propel housing supply in the forthcoming quarters.
SupplyDemand
BANGALORE’S REALTY AT A GLANCE
Property Prices
Rental‘Asks’
* Property prices represent quarterly change * Rental ‘asks’ represent yearly change * Supply is basis properties listed on 99acres.com * Demand is basis queries received on 99acres.com
Price movement in key micro-markets
* Average ‘ask’ rates have been calculated as per listings posted on 99acres.com
Localities Jul-Sep 2019 QoQ % Change YoY % Change
Whitefield 4,710-6,030 2% 5%
ElectronicCity 3,690-4,840 2% 4%
JPNagar 4,710-6,330 2% 9%
Yelahanka 4,500-5,440 2% 2%
SilkBoard 4,250-5,610 0% 2%
Marathahalli 4,970-6,290 1% 1%
Bellandur 5,610-6,750 2% 4%
Thanisandra 5,010-5,820 -2% 0%
Kaggadasapura 3,860-4,590 1% 4%
RajaRajeshwariNagar 4,280-4,990 2% 5%
7INSITE : Bangalore
With 5,400 projects awaiting possession, Bangalore’s realty sentiment remained tepid. While the number of projectlaunchesinJul-Sep2019grewto70from50inApr-Jun 2019, sales remained low. Unsold inventory stoodat70,000andresultantly,theaveragepropertyprices surged by a marginal one percent, QoQ.
The rental graph scored a two percent spike in average ‘asks’, YoY. Localities with good social infrastructure and connectivity in the western and southern belts remained the first choice of the tenant community.
North and East Bangalore captured 80 percent of the total share of new launches priced between Rs 60 lakh and Rs 1.20 crore. Many Category A builders focused on plotted developments over apartments to improve their profit margins. Notably, several projects were re-launched after registering under Real Estate (Regulation and Development) Act (RERA).
The inauspicious ‘aadi’ period, slow-paced progress of Namma metro, water crisis, ban on subvention scheme and low office space absorption marred the realty sentiment. In an effort to improve RERA’s effectiveness, the authority has resolved about 30 percent complaints so far. Further, the construction of two lakh budget housing units under PMAY (U) by 2022 may also help abridge the demand-supply gap in the affordable housing category. Such measures may help in restoring the homebuyers’ confidence in the under-construction segment.
50%
39%
24%
36%
16%
34%
Luxury Housing
Affordable Housing
Mid-income Housing
SupplyDemand
acres99India’s No.1 Property PortalDEMAND & SUPPLY
DYNAMICS
* Graph depicts demand and supply of residential inventory across budget segments in the studied quarter
99ACRES‘OUTLOOK
9INSITE : Bangalore 9INSITE : Bangalore
Among all zones, the housing hubs of North and East Bangalore such as Whitefield, Sarjapur Road, Hennur and Horamavu remained popular for new projects falling in the budget segment of Rs 60 lakh – Rs 1.20 crore. The city, however, recorded an unmet demand of about 30 percent for homes priced within Rs 60 lakh.
To match the ‘ask’ price in newly launched projects, builders reduced the average unit size to about 1,300 sq ft from 1,417sqftinthelastfiveyears.However,thedisequilibriumin the market sustained, and the city struggled to record higher sale conversions in the last few quarters.
The influx of new inventory at a higher rate over resale properties led the popular housing hubs of East Bangalore such as Panathur, Cooke Town and Ramamurthy Nagar clock maximum capital appreciation of four percent, each, in Jul-Sep 2019. The southern residential hubs, including Bommanahalli, Hulimavu, Subramanyapura and Billekahalli, also recorded price appreciation of four percent, each, QoQ. Overall, property prices remained under check and saw a marginal increment of a percent in the studied quarter.
The rental landscape, on the contrary, recorded a hike in average ‘asks’ by two percent, YoY. Backed by seamless connectivity and robust infrastructure, Rajaji Nagar and Kadubeesanahalli bagged maximum rental appreciation of eight percent, each, YoY. The popularity of paying guest accommodations and co-living spaces among the tenant community led micro-markets such as Cox Town, Mathikere, Hulimavu, Billekahalli and Bellandur post a seven percent rental hike, each, YoY.
KEY HIGHLIGHTS
CAPITAL &RENTAL
3% 3%
2% 2% 2% 2% 2%
0%
6%
-1%
-2%
3%
5%
8%
5%
4%
3%
2%
4%
0%
Capital
Akshaya Nagar
Rajaji Nagar Yelahanka Raja Rajeshwari
Nagar
Electronic City
Whitefield Hebbal
Thanisandra
Uttarahalli
Rental
Hennur
* %change represents quarterly capital movement and yearly rental movement 11INSITE : Bangalore
-6%
-5%
CONCLUDING REMARKSThe fear of an impending economic slowdown has impacted the market sentiment and led potential homebuyers to take a cautious stance. Although faster resolution of RERA complaints is a welcome step towards re-instilling the homebuyers’ trust in the under-construction segment, the city is yet to witness any notable change in the demand curve. With the developers’ efforts to reduce the average unit size to match the affordability quotient, Bangalore’s housing segment might see some growth in the ensuing quarters.
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Affordable Housing
Mid-income Housing
Luxury Housing
33%
30%
37%
45%
31%
24%
30%
31%
39%
46%
37%
17%
24%
39%
36%
34%
50%
16%
15%
36%
49%
21%
53%
26%
19%
26%
55%
21%
39%
40%
14%
33%
53%
22%
35%
43%
15%
29%
56%
30%
41%
29%
7%
18%
75%
15%
39%
46%
37%
15%12%
11%
10%
8%
4%
3%
MUMBAI
BANGALORE
PUNE
HYDERABAD
CHENNAI
AHMEDABAD
DELHI NCR
KOLKATA
* Graph depicts demand and supply of residential inventory across budget segments in top eight metro cities in the studied quarter
The data depicts share of new launches across metro cities in the studied quarter
BUDGET-WISE DEMAND & SUPPLY
Demand Supply
DELHI NCRDemand Supply
MUMBAIDemand Supply
BANGALOREDemand Supply
PUNEDemand Supply
CHENNAIDemand Supply
HYDERABADDemand Supply
AHMEDABADDemand Supply
KOLKATA13INSITE : Bangalore 13INSITE : Bangalore
*All prices are per sq ft rates
ANNEXURES
*All prices are per sq ft rates
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CAPITAL VALUES
Locality Jul-Sep 2019 Locality Jul-Sep 2019 Locality Jul-Sep 2019
Akshaya Nagar 5400
Banashankari 6400
Banaswadi 5529
Bannerghatta 5700
Basavangudi 10400
Begur 4470
Bellandur 6470
Benson Town 9900
Billekahalli 5500
Bommanahalli 4900
Bommasandra 3500
Brookefield 6080
BTM Layout 6000
Budigere 4900
Cooke Town 9160
CV Raman Nagar 6200
Dodda Nekkundi 5100
Doddathoguru 3750
ElectronicCity 4700
FrazerTown 9800
Gottigere 4500
Gunjur 4600
Harlur 6400
HBR Layout 5200
Hebbal 7700
Hegde Nagar 5620
Hennur 5450
Hoodi 5950
Horamavu Agara 4500
Hormavu 4550
HSR Layout 6600
Hulimavu 5400
Indira Nagar 10400
Jakkur 5640
Jalahalli 5885
Jayanagar 11200
JPNagar 5800
Kadugodi 4520
Kaggadasapura 4400
Kasavanhalli 5250
Kengeri 4170
Koramangala 10525
KR Puram 4630
KudluGate 6710
Kundalahalli 5700
Mahadevpura 5800
Malleshwaram 11740
Marathahalli 6170
Nagarbhavi 4750
Nagavara 6420
Panathur 6155
RajaRajeshwariNagar 4850
Rajaji Nagar 12300
Ramamurthy Nagar 4500
RT Nagar 5400
Sahakara Nagar 6250
SanjayNagar 7200
Singasandra 4240
Subramanyapura 4920
TCPalaya 5280
Thanisandra 5300
Uttarahalli 4530
Varthur 5070
Vidyaranyapura 5520
Vijayanagar 5500
Whitefield 5900
Yelahanka 5300
Yeshwanthpur 7350
AECS Layout 20
Akshaya Nagar 15
Arekere 17
Banashankari 17
Banaswadi 17
Basavangudi 23
Begur 15
Bellandur 22
Billekahalli 19
Bommanahalli 17
Bommasandra 13
Brookefield 20
BTM Layout 19
Cooke Town 24
Cox Town 25
CVRamanNagar 17
Doddathoguru 15
Domlur 27
Electronic City 15
Frazer Town 24
Gottigere 12
HBRLayout 18
Hebbal 18
Hennur 17
Hoodi 19
Horamavu Agara 15
Hormavu 15
HSR Layout 22
Hulimavu 16
Indira Nagar 26
ITPL 20
Jakkur 15
Jalahalli 16
Jayanagar 21
JPNagar 17
RENTAL VALUES RENTAL VALUES
Locality Jul-Sep 2019
Kadubeesanahalli 21
Kadugodi 15
Kaggadasapura 16
KalyanNagar 18
Kengeri 12
Kodihalli 20
Koramangala 26
KR Puram 15
Kumaraswami Layout 13
Kundalahalli 19
Mahadevpura 20
Malleshwaram 29
Marathahalli 20
Mathikere 15
Murugeshpalya 20
Nagarbhavi 14
Nagavara 16
Panathur 21
RT Nagar 15
Raja Rajeshwari Nagar 13
Rajaji Nagar 21
Ramamurthy Nagar 14
Richmond Town 30
Sahakara Nagar 16
Sarjapur 16
Subramanyapura 13
TC Palaya 13
Thanisandra 17
Ulsoor 27
Uttarahalli 13
Vidyaranyapura 13
Vijayanagar 17
Whitefield 19
Yelahanka 15
Yeshwanthpur 21
15INSITE : Bangalore
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The Insite Report by 99acres.com captures the quarterly capital
trends and the annual rental analysis of residential apartments
in key real estate markets – Delhi NCR, Mumbai Metropolitan
Region (MMR), Bangalore, Pune, Chennai, Hyderabad, Kolkata
and Ahmedabad. In order to assess the prevailing 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 Jul-Sep 2019.
METHODOLOGY
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