The year 2017 was a happy one for Bangalore. For a city croaking under the weight of crumbling infrastructure, the 42-km Phase I network of Namma Metro became fully operational last year. The impact of the Metro has been enormous, not just for grateful Bangaloreans, but also the real estate industry.
With other positive developments like RERA, Bangalore’s real estate industry emerged smiling at the end of Q4 last year. Meanwhile, despite recent layoffs in the IT/ITeS companies and start-ups, office space absorption continued to be strong in Bangalore.
On the supply front, developers were upbeat, and the city saw nearly 36% increase in the new units supply in Q4 2017 as against Q3 2017. East and South Bangalore witnessed maximum real estate activity during this period.
Interestingly, the affordable segment witnessed maximum launches in Q4 with the majority of launches in the IT/ITeS hubs of Bangalore.
Total units supply
Bangalore witnessed a launch of about 8,800 new units in the last quarter of 2017, recording a rise of about 36% as against the previous quarter.
- Out of the total units launched, nearly 42% were skewed towards East Bangalore, followed by South and North with 26% and 25% supply respectively.
- In addition to catering to the housing demand of employees working in Whitefield and along the Outer Ring Road, East Bangalore also benefits from realistic property values and availability of projects in all budget segments.
- The top areas that saw maximum new supply in the East included Varthur, Whitefield, Hoodi, and Sarjapur Road.
- The North Zone, which was in the limelight in 2016, recorded the launch of over 2,000 units in Q4 2017. This part of the city has outshined largely because of increased commercial activity in the last two years. With the under-construction Peripheral Ring Road (PRR) project, this zone is expected to well in the coming years as well.
Property segmentation
As per property segmentation, apartments had a clear majority of 82%, followed by plots with 16%. Villas recorded a minuscule supply of 3%.
Areas that recorded maximum supply of plots were Mysore Road, Tumkur Road, Kanakapura Road, and Yelahanka. This can mainly be attributed to the availability of ample land parcels along these clusters.
Market segmentation
The affordable segment (within Rs 50 Lakh) gained significant ground in Q4 as against the mid-segment (Rs 51-85 Lakh) in Q3 2017.
In 2017, affordable projects took the lead backed by the government initiatives and sops accorded for ‘Housing for All by 2022.
This trend can also be attributed to the fact that Eastern micro-markets like Whitefield and Sarjapur Road that are essentially affordable recorded decent supply.
The affordable and mid-segment projects were largely skewed towards major IT/ITeS hubs in the city, namely Electronic City, Hoodi Junction, Mahadevapura, Varthur, Horamavu, and Hennur Road.
The popular projects in the affordable segment based on our data are:
