With the addition of new projects, Bangalore real estate market is expected to revive with an impressive flourish in 2021, as sales are also expected to recover. With the lowest inventory overhang among India’s top seven cities, Bangalore real estate may be able to regain its lustre sooner. Given the performance of sales in Q3 2020, the situation may improve in the coming quarters. The Karnataka Stamps (Second Amendment) Bill, 2020, also proposes to reduce stamp duty for flats priced under Rs 20 lakh from 5% to 2%. The steps aim to increase demand in the real estate sector.
Buyers will prioritise ready-to-move-in homes – There is no GST and appealing offers such as’move in now and pay later.’ There is a high demand for 2.5 BHK and 3.5 BHK configurations with extra space that can be converted into a work space. As WFH is the temporary new normal, functional and flexible homes that can accommodate working areas are necessary. Integrated townships may attract more attention.
Unsold inventory fell by 3% in Q1 2021 when compared to Q1 2020. In Q3 2020, 5,400 units shifted, representing a 63 percent increase over Q1 2020.
Localities to watch out for
There is an increase in reverse migration across India as urban residents seek to remain safe and close to their families. The demand for plotted developments and luxury villas in the outskirts and suburbs may increase, allowing for social distancing.
For example, in Bangalore, homebuyers often choose to live close to their office, sacrificing lifestyle preferences in the process. However, this is changing for the better. Businesses have said that their employees will work from home until June 2021 due to the pandemic. In consequence, homebuyers tend to prefer properties located in less densely populated areas, regardless of their distance from the workplace.
This trend is reflected in the fact that Bangalore real estate market neighborhoods such as Whitefield, Marathahalli, HSR Layout, and Electronic City were in high demand prior to COVID-19, but have now experienced a decrease in demand. In contrast, new areas attracting increased interest from homebuyers after May 2020 include Horamavu (32%), Yelahanka (56%), RT Nagar (42%), and Hebbal (42%). (36 percent).
When compared to pre-COVID-19 levels in Q1 2020, new launches recovered 68 percent in Q3 2020. During the last quarter, the majority of new launches took place in East Bangalore, which accounted for 37% of all new launches, closely followed by South Bangalore, which accounted for 33% of all new launches. The city saw the majority of new launches in the mid-segment category, accounting for 66% of all new launches.
Most preferred property types
In terms of properties of 1800 sq ft and up, mid-segment properties are the top choice of most homebuyers. Buyers prefer a 2.5 BHK to 3 BHK apartments within a budget of Rs 1 crore. Interest in self-sustaining integrated townships, as well as plotted and low-density developments, has grown.
Trends to watch out for
During the pandemic, the government looked for alternative ways to reduce the economic risk, and technology responded. Faster adoption of technology may be beneficial to the sector’s revival. Proptech, digital construction, precast technology, and 3D printing are all examples of innovations that can be used to drive growth and prosperity in the sector in the ‘new normal.’ Developers who promote the use of technology may be eligible for attractive subsidies or tax breaks from the state government.
Developers face a significant challenge due to a lack of liquidity. Lowering income taxes can help the sector by reducing the financial burden on buyers and increasing their disposable income. The government should implement a gender-based stamp duty pricing system.
Single window for approvals
A single-window clearance system for the Bengaluru real estate market will strengthen the market while streamlining supply and demand. This will make project implementation more efficient and smooth. This will also assist the sector in avoiding waste of time, money, and resources.