Real Estate Sector Sees Sunny Days as Demonetization and Policy Clouds Clear

BANGALORE, India - July 24, 2018 - PRLog -- Flat Sales and Launches in the city are seeing some green shoots, particularly in IT hubs, as clouds of skepticism over new legislation and common hurdles began clearing.

There are too many residential apartments launched in Bengaluru rose to 13,345 towers between January and mid-June from 8,232 towers in the preceding six months, Real Estate consultancy NSE 0.00 % Vestian Global Workplace Services said in a statement. About 65% of the new flats are priced below Rs 60 lakh a unit, it said. Of the newly started flats, 3,762 units, or about 28%, were sold in the first half of this year, according to the report. In the second half of last year, 2,181 of the flats launched then, or 26.5%, had been sold.

The state's Department of Stamps and Registration confirmed the improving trend. "Over the past six months, we saw an upward trend in the sales of flats… we are hoping this will continue," said KV Thrilok Chandra, inspector officer of registration and commissioner of stamps.

Bangalore Real Estate market suffered a slump last year, in terms of both sales and launches. Work on several residential apartments projects was stuck pending confirms from a government focussed on clearing the city of encroachments of stormwater drains and lakebeds. Also, even as demonetization hit the realty sector hard, the introduction of the Real Estate Regulatory Authority and the Good and Services Tax last year added to the uncertainty.

"East and South Bengaluru, the key IT hubs in the city, accounted for ample demand and supply (in the first of this year)," said Shrinivas Rao, Chief Executive Officer (Asia-Pacific), Vestian Global. "The southern zone accounted for the largest share of new launches (41%) as well as the highest sales of new launches (54%) in the first half." Builders tweaked their projects to launch more compact homes to suit the shrinking budgets of flats buyer.

In the 1st half of this year, most of the newly launched flats were 2bhk flats as compared with more 3 bedroom flats between July and December 2017, Vestian said in its report. The average price of the new homes was RS. 53 lakh, 15 percent lower than the price in the 2nd half on 2017, it said.

"there has been an increase in our buyer base as well as sales after the dust settled around GST and RERA. We expect sales to further improve in the coming fourth months," said Viswa Pratap Desu, senior vice president, brigade Enterprises, Marketing.

The availability of a "good range of projects and the absence of a steep price hike are helping in the improvement of consumption," said JC Sharma, managing director, Sobha, one of the largest residential real estate builders in the city.

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