Increased commercial activity, an uptick in sales volume, and several infrastructure upgrades in 2018 kept the real estate market in Bangalore much more vibrant and resilient than other cities. After the introduction of key reforms such as RERA and GST, this year was more of a re-calibration for the industry. The growth trend is likely to continue in 2019 as well.
The year 2018 also reaffirmed Bangalore’s pivotal position in the commercial space. According to a JLL report, the city accounted for the highest absorption of office space at 7.9 million sq. ft. in the first nine months of the year. This demand has been primarily driven by sectors such as IT/ITeS, manufacturing, consultancy service, and e-commerce. Consequently, even the residential sector kept up the momentum this year.
So, how did residential real estate fare for the city? RoofandFloor research reveals that about 870 projects were launched in 2018. About 50% of this new supply was in the mid-segment (Rs 40-70 Lakh), followed by 24% in the affordable segment (Less than Rs 40 Lakh) and 26% supply in the luxury segment (Rs 70 Lakh and above).
Reaffirming the data, M Murali, Chairman and Managing Director of Shriram Properties says, “Continuing the supply trends of 2018, we expect properties in the mid and affordable segments to see more supply and demand in the coming year as well.”
Regarding BHK configurations, 2BHK apartments ruled the roost with maximum supply, followed by 3BHK and 1BHK apartments. While apartments dominated the property spectrum, plots also recorded substantial supply at 32%, followed by villas.
Bangalore sheds unsold inventory
Bangalore out-performed all other cities in terms of shedding unsold housing inventory. A recent report by ANAROCK Property Consultants reveals that the city saw a remarkable decline of 25% in total unsold stock across the top metro cities.
“Burgeoning commercial activity, a dynamic start-up culture, and realistic property prices dictated by end-user demand have kept Bangalore’s real estate market vibrant, and generally more resilient than in other cities,” explains Anuj Puri, Chairman – ANAROCK Property Consultants.
He further adds, “The strong IT/ITeS sector continues to power most of the city’s residential demand and supply, which is why housing sales have remained healthy despite all macroeconomic headwinds.”
Karnataka RERA: Progress so far
Earlier this year, Karnataka made it mandatory for developers to update the progress of their projects on a quarterly basis. As per the (Real Estate Regulation and Development) Act, 2016 (RERA) about 70% of the funds collected from buyers should go towards the cost of the project. With regular updates, every civil work will be accounted for, and buyers will have a clear idea of the construction progress.
What’s in store for Bangalore’s real estate in 2019?
“Residential real estate market will witness an upsurge of minimum 20% in the coming year, besides the ongoing demand for office space,” says Murali. Mid-segment and affordable properties in the peripheral areas will be in high demand.
It is going to be East and South Bangalore in 2019!
Due to affordable property rates and availability of land parcels, Sarjapur-Attibele Road, Whitefield Extension, and Kanakpura Road are some of the localities to watch out for in 2019. Yelahanka- Kogilu in North Bangalore is also a strong contender. Due to the upcoming Metro line, markets like Hosur Road and Electronic City will also draw significant attention.
“Next year is going to be a bright year for both developers and homebuyers, as there will be tremendous opportunity to invest in mid-market and affordable housing,” says Murali. Overall, accelerated by the present government measures, Bangalore real estate sector will surely progress with increasing demand in the coming year.