Residential property market in Bengaluru has been affected due to the implementation of RERA (real estate regulatory act). However the capital of city of Karnataka is inching towards recovery.
As per the Colliers International’s analysis, performance of Bangalore’s residential property market has dropped after RERA, in H1 2017, city ranked second among all the residential launches in India with almost 13400 new unit launches. Market faced a drop of 23% as compared to H1 2016. Moreover, strong commercial sector performance in Bengaluru indicated a good demand for the residential sector in medium to long term.
The Karnataka RERA received around 977 applications for project registration and about 273 for real estate agent registration as of 24th August, 2017. However, the number of project and agents registration 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, Sr. Director, Colliers International India.
As per Colliers International’s research, the capital values in locations such as Central, Yelahanka, Whitefield and Airport Road recorded a 3-6 percent decline in H1 2017 while off-central locations such as Jayanagar, Koramangala, Sadashivanagar and Bannerghatta witnessed a 1-4 percent increase. “We expect the capital values to largely remain stable in short to medium term owing to the present situation in market post RERA,” said Goutam.
In terms of housing sales, despite of the expected fall in the number of new launches in upcoming quarters due to RERA implications, mid-range segment will continue driving sales as the festive season approaches in September & 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.