City’s real estate market makes steady gains
Magicbricks’ Bengaluru PropIndex for Jan-March 2017, a real estate quarterly report, has said that due to demonetisation there was 40% reduction in transactions but timely steps taken by the government have resulted in the city’s real estate market making steady gains with an average price increase in 65% of the localities.
The flagship report of Magicbricks – India’s No.1 property portal – that captures price movement across 94 major localities in India’s Silicon Valley stated that in order to boost growth in the aftermath of demonetisation the Karnataka government had offered some respite in terms of postponing the guidance value hike, better utilisation for TDR and increasing the pace of infrastructure works. These initiatives have resulted in Bengaluru witnessing marginal improvement in price level for the sixth consecutive quarter in Jan-March 2017 since December 2015.
Bengaluru had 65% areas with an average price increase. On the contrary, around 35% of the areas, that include some prominent localities like Whitefield, HSR Layout and Marathahalli, witnessed decline in prices. This led to the city price index rise of 1% in this quarter.
Sudhir Pai, CEO-Magicbricks, says, “The Bengaluru market continuous to make steady gains with 2% increment in weighted average price in Jan-Mar 2017. Price movement across all budget segments was positive in the Jan-Mar 2017 quarter. With more than 80% of consumer preference and distribution of supply/ localities in the sub-Rs. 6,000 per sq. ft category, Bengaluru remains a price sensitive market. As the real estate sector goes through a transitional phase with the introduction of RERA, GST, Benami Act and REITs, a tool like PropIndex becomes a key indicator that will help consumers get a fair idea about the changing times.”
The quarter was positive for inventories across all price segments. The Rs.4,000-6,000 per sq. ft price range which accounts for 68% of consumer preference and 75% of actively traded properties, was stable. More than 60% localities in this price bracket saw increment. Important localities like Electronic City, localities along Bannerghatta Road, Horamavu and Kundalahalli in the Rs. 4,000-5,000 segment saw quarterly price gain.
Analysis across 94 localities shows that Ready-to-Move-in (RM) properties with an average price of Rs. 5,342 per sq. ft were more expensive than Under-Construction (UC) properties at an average price of Rs. 5,203. The average price of both RM properties and UC properties witnessed a marginal gain of 1.2% and 1.6% respectively.
The overall outlook remains weak without any major price movement. This means the transaction activity is unlikely to pick up in the near term. However, price sentiment for high consumer preference localities like Whitefield and Sarjapur Road in the Rs. 5,000-6,000 per sq. ft bracket remains positive. Price level in Electronic City is likely to remain stagnant.