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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

CONTACT US01204879400Monday - Friday9:30 AM to 6:30 PM ISTEmail: content@99acres.com

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.

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