Bengaluru housing sector outstrips Hyderabad, Chennai in Q1 2018
Addition of nearly 6,800 new units marks 127% increase over previous quarter
Emerging
as the front-runner in the major South Indian markets in terms of new
housing supply
infusion, Bengaluru saw significant growth in new housing launches as
well as absorption in Q1 2018. In fact, Bengaluru saw highest launches
among these markets with nearly
6,800 new units supply in comparison to Hyderabad and Chennai, which saw the launch of
2,600 and 2,100 units respectively. Bengaluru also leads on the
absorption front, with a total of 11,500 units sold in Q1 2018.
“Increased commercial activity, positive buyer sentiments, infrastructure upgrades and improved
job opportunities in the city have given a major fillip to Bengaluru’s housing market,” says
Anuj Puri, Chairman – ANAROCK Property Consultants. “This market
is largely driven by the end-users who were in wait-and-watch mode so
far. These buyers have now actively returned to the market on the back
of the overall sentiment upsurge resulting from
the Bengaluru’s rapidly improving market fundamentals.”
(Supply & absorption trends - Bengaluru, Hyderabad & Chennai)
Bengaluru realty on an upswing
“Even at a pan-India level,
Bengaluru’s residential market is currently only second to the Mumbai
Metropolitan Region (MMR) in terms of supply and absorption for Q1 2018,”
says Puri. “This enhanced market performance is primarily led by
increasing demand from the IT-ITeS sector,
which has belied the fears of US President Trump’s policies putting a
fatal dent into India’s InfoTech story. Other factors at play in
Bengaluru are the thriving start-up ecosystem across the city, the
presence of excellent education and healthcare facilities,
and constantly improving physical infrastructure.”
(Supply & absorption trends – Top 7 cities)
A closer look at the city-level data of a q-o-q launch analysis clearly reveals a massive increase
in Bengaluru’s housing launch supply - from 3,000 units in Q4 2017 to 6,800 units in Q1 2018, accounting to
nearly 127% increase. The data further reveals that unsold housing stock in the city declined by nearly 5% - from
96,000 units in Q4 2017 to 91,000 units in Q1 2018. Also,
property prices have seen a marginal increase of 1% from Q4 2017 to Q1
2018, with the current average property prices in Bengaluru being
₹4,850/sq.ft.
Besides
housing many HNIs, the city is also home to several mid-level IT
professionals who have
added to the demand for mid-segment (₹ 40 lakh - ₹ 80 lakh) housing.
Micro markets that have multiple options in this segment include
Whitefield, Outer Ring Road, Sarjapur Road, and Electronic City, and
also a few locations in North Bengaluru. Affordable housing
options (< ₹40 lakh) are also fast catching up in the suburbs of
Hosur Road, Mysore Road, etc.
Out
of total 6,800 units launched in Q1 2018, nearly 84% (5,700 units) fall
in the mid-segment
category. Of these, the majority were launched in South Bengaluru and
North Bengaluru (which accounted for 34% and 31% of the mid-segment
supply respectively). The supply in the critical mid-segment category
has seen a major uptick in Q1 2018 - from 1,400
units in Q4 2017 to 5,700 units in Q1 2018. Overall, the mid-segment
housing category saw an increase of more than 300% in this quarter,
while the ultra-luxury segment saw a decline.
Region-wise market drivers
- In North Bengaluru, the proposed developments including the Information Technology Investment Region (ITIR), aerospace SEZ, Devanahalli Business Park, Global Financial District, etc. are driving growth. Proximity to the airport, the elevated expressway and metro rail corridor development have also upped the game for North Bengaluru.
- Residential growth in East Bengaluru is driven by the presence of large IT hubs and several key infrastructure upgrades in recent times. The under-construction Purple Line extension of metro rail corridor up to Whitefield will ease traffic in the region and has caused an upsurge in homebuyer interest in East Bengaluru.
- In West Bengaluru, availability of large land parcels, its industrial areas and metro rail corridor development have been the main residential market boosters. This region will see a major infusion of residential developments in the future.
- South Bengaluru is largely driven by demand from the IT hub of Electronic City) and various infrastructure upgrades, including the under-construction metro project (proposed yellow line from RV road to Bommasandra). South Bengaluru is seeing a spurt in residential activity, particularly in the mid-segment category.
These
overall market indicators showcase strong Q1 2018 growth in the
Bengaluru residential
real estate market. Appreciation of capital and rental values is
certainly on the cards for this city in the foreseeable future.
Arun Chitnis
Media Relations
ANAROCK Property Consultants Pvt. Ltd.
Office No. 901A 9th Floor, ONYX,
Next to Westin Hotel, Koregaon Park,
Pune – 411001
M: +91 9657129999
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