Residential property market is Bangalore is been impacted due to implementation of real estate regulatory act. However the city is inching towards recovery.
As per Colliers International’s research, the performance of Bengaluru’s residential market post RERA, in H1 2017, the city ranked second in total residential launches in India with about 13,400 new unit launches. The market faced a notable drop of 23% compared to H1 2016. Moreover, the strong office sector performance in Bengaluru indicated a healthy demand scenario for the residential sector in medium-to- long term.
The Karnataka RERA received about 977 applications for registration of projects and about 273 for registration of real estate agents as of 24th August, 2017. However, the numbers of project registrations and agents in Bengaluru was much lower.
“This is an unprecedented situation for all developers across India. Demonetisation has resulted in fundamental change in most of the developer’s approach towards their businesses and when RERA came into picture, they were forced to put their house in order. To make their existing projects RERA compliant, the developers wereleft with no band-width and had to take a pause before taking any further decisions related to new projects, thus leading to decline in number of new launches in Bengaluru” says Goutam Chakraborty, Senior Director, Colliers International India.
As per Colliers International’s research, the capital values in locations such as Central, Airport Road, Whitefield and Yelahanka recorded a 3%-6% decline in H1 2017 while off-central locations such as Jayanagar, Sadashivanagar, Bannerghatta and Koramangala witnessed a 1%-4% increase. “We expect capital values to largely remain stable in short-to-medium term owing to the present skeptical situation in market post RERA,” said Chakraborty.
In terms of residential sales, in spite of expected fall in the number of launches in upcoming quarters due to RERA implications, the mid-range segment will continue to drive sales as the festive season approaches in September and October. However,various promotions by developers and attractive payment plans amidst a soft home loan interest rates environment will drive the residential sales in the market.
Source: ET Realty