Yet again, Bangalore is upbeat with its real estate sales. With maximum project launches, the year also has the highest absorption of residential units in the third quarter of 2014 compared to last year.
Amidst positive market drivers, August-September-October has seen a nine per cent growth in absorption of residential units in Bangalore compared to six other major cities in India.
According to a ‘quick estimate’ provided by Knight Frank in Bangalore, while markets as NCR, Poona, Chennai, Hyderabad, Mumbai and Ahmedabad saw a de-growth with a decline in residential sales in the third quarter of 2014 compared to the same period of 2013, Bangalore was the only city that revelled with a positive growth.
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“Bangalore has sold nearly 15,000 units in the third quarter, and by the end of 2014 it is estimated that nearly 60,000 residential units would be absorbed,” said Samantak Das, Chief Economist and Director-Research, Knight Frank. “This would amount to a 4 per cent annual growth compared to the overall absorption of units in 2013,” he said.
Although the quarterly 9 per cent hike in sales doesn’t mean much, “it seems a positive trend for Bangalore in the background of a subdued and just-recovering all-India market,” said Mr. Das.
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Another positive factor is that Bangalore’s nearly one lakh unsold units (as of June 2014) are expected to be absorbed in the next seven quarters, i.e., 21 months, according to Knight Frank’s market observation. “This seems the best forecast, as NCR with an unsold inventory of 1,68,000 units is expected to take nine quarters to sell, and Mumbai with 2,13,000 units is said to be looking at 12 quarters to realise the money invested,” explains Mr. Das.
IT backing“The difference is in Bangalore not seeing a price resistance, and has the IT and ITES backing for its growth. Sporting a rate of Rs. 5000 -30,000 (per sq. ft) range, the city makes it a market for all,” he says.
Commenting on RBI’s latest bi-monthly review, Mr. Das said, “Although the sentiment of ‘no difference in repo rate’ seems de-motivating making it a challenge for real estate to sail through, RBI perhaps is looking at having a breathing time when the economic fundamentals are just about in place and inflation is tamed.”