Bangalore Real Estate Market – Signs of an upswing

by Ashwin P. Blogger Enthusiast

It has been over two years since the RERA Act came into effect and close to 18 months since the demonetisation of higher valued Indian currency. Like for any major city in India, these two initiatives taken by the central government have had a significant impact on the real estate in Bangalore as there was a major pause in both the execution and sales of properties.

While the real estate was subdued for the most part of 2017, the year 2018 saw demand from the IT space breathe a fresh lease of life into the Bangalore real estate.

As per a report, Bangalore has emerged as the front-runner in the real estate rebound in south India. There has been an increase in the number of flats for sale in south Bangalore, followed by an increase in the north and west of Bangalore.  Overall, around 11,500 flats were sold in the period between January-March of 2018. In comparison, the other two major metros in south, Hyderabad and Chennai saw a sale of 3,500 and 2,300 units, respectively. These numbers pale in comparison with what Bangalore has achieved making it one of the top locations for real estate not just in south India but in the country.

At the pan India level, Bangalore ranks second only to the Mumbai Metropolitan Region (MMR) in terms of both sales and supply for the first quarter of 2018.

 

Reasons leading to the upswing

One big reason why Bangalore always tends to rank high in real estate sales is because, it is one of the few markets that is user-driven. Increased commercial activities and infrastructure developments are other major reasons Bangalore is seeing an upswing. Long-delayed infrastructure developments have picked up leading to rising levels of developers' confidence.

The big push, however, is being given by the growth of IT and ITES sectors resulting in increased job opportunities that have brought in a fresh set of home buyers to the city. The reduction in layoffs numbers and stability in existing jobs is prompting employees to move away from rentals and opt for the purchase of homes.

The start-up ecosystem in Bangalore, the largest in the country, is another reason for the upswing in Bangalore real estate. Though there has been a lesser number of emerging start-ups over the last two years, the ecosystem as a whole is more stabilized and focussed which is helping it grow steadily.

RERA Act has brought in renewed confidence in the minds of home buyers resulting in the rise in sentiment. Home buyers are now much more confident and reassured, all thanks to the provisions of the RERA Act that give the buyers the much-needed power. Developers will now have to keep buyers updated on the progress of the project and unlike in the past, they cannot divert funds collected from buyers to a different project than the one the funds have been collected for.

 

Steady growth in volumes and value

Over the years, Bangalore has been segmented into different pockets spread across the length and breadth of the city. These pockets or areas have over time, become self-sufficient with the required physical infrastructure and connectivity making them hotspots for realtors.

Areas across north, south, east and west of the city have steadily built up their real estate value encouraging developers to take up newer initiatives in these areas. This is another reason Bangalore has shown a faster recovery post the demonetisation in December of 2016.

While areas such as Whitefield, Sarjapur Road, Outer Ring Road are showing a rise in apartment volumes. There has been a steady increase in the value of apartments near Banashankari, Kanakapura Road and a few locations in the north of Bangalore. Overall, this is contributing to the steady growth of real estate in the city of Bangalore.

Incidentally, there has also been a slight upward trend for luxury apartments in south Bangalore. This is due to the presence of a large number of High Net-worth Individuals or HNIs in Bangalore. Bangalore is also one of the bigger markets for luxury apartments in the country behind Mumbai and Delhi NCR.

The rise of north Bangalore and the resurgence of south Bangalore will help expand the real estate market while allowing for even smaller players to take a pie of the total market share.

Experts state that renewed sentiment in buyers' mind, focussed approach towards projects by developers and fastened physical infrastructure and road developments will push for further growth in Bangalore real estate over the next 18 months or so. Since Bangalore is an end-user driven real estate market, the growth in IT and ITES along with the start-up ecosystem will always provide a steady demand for residential and commercial real estate. 

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Created on Jul 30th 2018 04:04. Viewed 553 times.

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