1.2 lakh unsold homes in Bengaluru

The usually resilient Bengaluru residential real estate market has suffered a setback as project launches and sales have tumbled in second half (H2) of calendar 2016, according to Satish BN, Executive Director (South), Knight Frank.

Project launches fell by 45 per cent to 13,395 units in H2 2016 compared with 24,190 units in H2 2015. Similarly sales also fell by 27 per cent to 20,309 units compared with 27,849 units in H2 2015. Drastic fall in H2 2016 has pulled the annual numbers to below 2015 performance.

Bengaluru has always been known for its resilience. After observing a peak in 2013, in the last two years the city has come under considerable pressure. While launches were already on a decline, owing to factors such as the increasing unsold inventory in the city, BBMP’s (civic body) drive to confront the encroachment of lake beds and other issues like the announcement of demonetisation in Q4 2016 led to curbing of new launches further,” Satish told BusinessLine .

“South Bengaluru has seen the highest launches and sales primarily due to affordable budgets, employment hubs, social infrastructure and upcoming metro connectivity,” he added. Demonetisation has also impacted the Begnaluru’s real estate market quite substantially in Q4 2016, new launches and sales fall by 65 per cent and 45 per cent respectively during November–December period. “The notional revenue loss to the real estate industry is estimated at ₹4,800 crore and state government’s loss on stamp duty is estimated at ₹250 crore,” said Satish.

Bengaluru has unsold inventory at 121,248 units. The quarters to sell (QTS) for Bengaluru has been increasing gradually since September 2013, and currently stands at 9.3 quarters. So it means it needs 2.3 years to offload the unsold inventory.

Satish said, “Premium residential markets observe a substantial decrease of 12 per cent in new launches during H2 2016 as compared to H2 2015; sales witness a dip of 3 per cent in H2 2016 as against H2 2015.”

Talking about the geographic spread, Satish said south Bengaluru accounted for 47 per cent share in the total number of new launches and sales in H2 2016.

North Bengaluru saw an increase in new launches to a sizeable 31 per cent in H2 2016 from 25 per cent in H2 2015; sales decrease to 18 per cent in H2 2016 from 25 per cent in H2 2015

While east Bengaluru witnessed new launches declining to 18 per cent in H2 2016 from 27 per cent in H2 2015 while sales volumes see a slight increase to 27 per cent in H2 2016 from 26 per cent in H2 2015.

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