The common belief among real estate developers and experts is that the market is reviving and that housing demand is going to shoot up again in Bengaluru. Major IT companies are coming back with new hiring plans and pay scales are going up too. Due to RERA, GST, the Union Budget and demonetisation, homebuyers and developers went into an observing mode. Sales dipped and so did construction of new projects. Now that the worst is over, there is a chance that the huge supply-demand gap will shrink.
Positive Signs Everywhere
The government is trying its level best to rope in big developers to invest in MIG category houses, as it is this category that will witness an upsurge of demand. Moreover, renowned developers are also being asked to wholeheartedly participate in the Housing For All 2022 project. All these are positive signs and soon Bengaluru will see real estate activities happening full throttle. The suburbs will likely be the next big real estate destination with the peripheral areas already becoming real estate hotspots.
Suburban & Peripheral Areas A Hit
The new Floor Area Ratio (FAR) has led to a drop in the average built-up area being offered by promoters. Land prices are comparatively lower than in the main city. Hence, both developers and homebuyers are getting drawn towards the suburban areas where plenty of budget-friendly properties with sophisticated infrastructure are coming up. Post RERA implementation, the industry forecast is very much in favour of Bengaluru real estate. It is only a matter of time that the residential market will see a revival in both the budget and luxury brackets.
INR 40-50 Lac Houses In Top Demand
The middle-income apartments are a craze now and they have a typical set of buyers, mostly IT professionals. These professionals require properties that are in close proximity to their workplaces. They also demand decent infrastructure, easy access to academic and healthcare facilities and hassle-free commute, all at competitive prices. Recent studies on Bengaluru property market have revealed that properties in the range of INR 40-50 lacs are in maximum demand.
Limited Resources But Increasing Homebuyer Demands
Most property buyers in Bengaluru are in the lookout for affordable units providing multiple facilities. As a result, the luxury housing segment has taken a hit somewhat, although Bengaluru is the only Indian city that has seen a 45 percent spike in demand for luxury homes. However, luxury homes in peripherals have seen a drop in demand. Resources are limited but people are demanding more. In forthcoming quarters, the Bengaluru residential market will see a fresh supply of new homes.
When Capital Values Dipped
Most luxury projects are in the pipeline or in the pre-launch stage. There will be a reduction in capital values by 2-5 percent though. The primary reason for the dip in capital values, especially in the secondary market, is demonetisation. It impacted housing demand so much that “the entire volume of ongoing transactions came to an unexpected halt,” revealed Mahesh Somani, Chairman, National RERA Committee, NAR India. Moreover, rampant downsizing in the IT sector also added to the pain.
Market Revival Is A Sure Thing!
All these are changing. A change in real estate practices and economic policies have ushered in a lot of positivity in the Bengaluru real estate market. The primary market seems to be pretty stable now. Market revival is likely to get concretised once there is complete implementation of RERA throughout the country. The demand graph has already started showing signs of moving up in the ready-to-move properties having Occupancy Certificate. More and more developers are adjusting their business approach in these new times of transparency.
Developers Getting Ready For The Festive Season Onslaught
Housing demand is expected to rise manifold during the festive season because of the structural reforms that have upped buyer sentiments. Developers are also gearing up to cater to the pent-up demand. Last year, homebuyers chose to stay away from the market, primarily because of insanely high property prices, uncertain economic scenario and also execution delays. The festive season is considered auspicious for property purchase. Hence, developers are looking to increase their sales this year.
“Most aspiring home buyers deferred their purchase decisions, preferring to wait until RERA kicked in fully. Though most developers offered compelling discounts and schemes, buyers stuck to their cautious approach during the last festive season,” Chairman of Anarock Property Consultants, Mr. Anuj Puri, told ET Realty.
Bengaluru Real Estate A Safe Bet
During the first half of 2017, the realty sector attracted institutional investments worth $1990 million due to progressive policies and a stable economy. The residential sector attracted 54 percent of the investment, which comes to around $1075 million. It is evident that the Bengaluru real estate remains a safe bet for the investment perspective. Areas such as Whitefield, city centre CBD, Mysore Road, Thanisandra-Hennur road and Kanakapura Road are the promising ones.
The Namma Metro & Increase In Property Values
Four renowned property developers in Bengaluru (Sobha, Prestige, Brigade and Purvankara) reported a marked increase in operational revenue in Jan-March 2017, over Jap-March 2016. The launching of new metro routes by Namma Metro is also leading to an increase in property values of surrounding areas. As the city is known for its massive traffic snarls, homebuyers are looking to purchase properties near the metro stations in order to make commuting easier. The state government is planning to raise guidance value of properties along metro lines this November.
Transparency & Trust Helping A Lot
It is common belief that the professionalism Bengaluru developers show is far greater than any other city in India. This is yet another factor why more and more homebuyers are looking to invest in property here. This is also true for commercial property seekers. There is a basic level of trust that is never compromised in this city. The growth in economy is also bringing in a balance between office space absorption in the city and homes supplied. The property range offered here is also worth a praise.
One can find all kinds of properties here and at varied price offerings. There are ultra-luxurious homes for NRIs and HNIs and there are also affordable houses offering better amenities and greater connectivity options. Up to now, it has been a tremendously eventful year for the Bengaluru real estate sector. More is coming!
Don’t Forget To Read: