Vibes emanating from Bengaluru’s ready-to-move-in apartments’ sector are favourable. The clouds of uncertainty have started melting away fast. A flush of fresh inquiries has injected new dynamism. The ‘wait and watch’ mood in the wake of demonetisation is gradually yielding place to optimism, cautious though, of a bullish market by the middle of the year. If the realtors are not exactly exultant, they see no reason for panic either. First, the inventory overhang for the city was the least among the six metros, say, a manageable 10%. But now that it is well past two months since demonetisation ended, the market is said to be steadily gaining vibrancy. There is unanimity that outlook for the city is getting rosier once again.
Realty is just gearing up to embrace a new clientele for the ready-to-move-in apartments. Though no one would like to hazard a guess about the dimension of the category, it is estimated that not more than 35,000 completed units await registration in the name of buyers.
Given the overall state of the country’s economy — the city being a favourite destination for all kinds of investment — realtors see no scope for the blues that momentarily clouded the outlook during the last quarter of the year just past coming back.
Bengaluru contributes $130 billion to the total national GDP ($ 2.5 trillion). It is the third biggest contributor after the National Capital Region of Delhi and Mumbai.
Secondly, biggies like Mercedes Benz, Google and Apple are setting shop in the city to burnish its reputation.
Thirdly, the city currently hosts nearly one million people who earn Rs. 10 lakh per annum. Says Chandrashekar Hariharan, Chairman of the Zed Homes group, this number is set to double in the next five years at the current CAGR (Cumulative Annual Growth Rate). He is optimistic about India and Bengaluru remaining the most favourite destination for global investors for some years to come as the country has attained political stability. “The country will have the largest housing deficit by 2030, which should be sufficient to dispel pessimism,” he remarks.
Gaining momentum
Thomman Olapaly, executive director, Nandi Housing, concurs with Hariharan and feels that the realty scene now has much clarity. Thomman says most home-buyers in the city are the ones who have lived here for nearly seven to eight years and have adjusted well with the city’s ecosystem. He agrees that movement had slowed down during the last three months, but has picked up since January. Nandi Housing has on offer 250 ready-to-move-in apartments, mainly 3-BHK, at the Nandi Citadel on Bannerghatta Road. These are part of an 850-apartment project coming up on 12.5 acres.
Says Niranjan Tadanki, Head, Marketing, Ozone Group, ready-to-move-in apartments enjoy higher credibility as customers are reassured of what is on offer. “You get what you see, not what is shown on paper.”
He says 320 units in Aqua One phase of the Group’s Ozone Urbana project, an integrated township on 185 acres at a five kilometre drive from the Kempegowda International Airport, are ready for occupation. Niranjan says Bengaluru did have slight oversupply for sometime but there are signs that customers are queuing up again.
Another 318 apartments in the senior community category in Ozone Urbana are ready for being handed over. While 50 senior couples have already moved in, another 150 units have been sold. The community is expected to be fully active by April. Providing catering as well as round-the-clock medical assistance, the movement is said to be brisk.
Niranjan says Bengaluru, being an end user-driven market, offers good prospects for realtors. Though he sees some constraints of infrastructure coming in the way of rise in demand, he hastens to add that growth is bound to be ceaseless, given the city’s climatic advantage, cosmopolitanism and good schooling system.
Exaggerated
Another leading developer, who does not want to be identified, says Bengaluru realty was not affected too badly and rejects the exaggerated figures of inventory.
He says Bengaluru rates were always steady and never shot through the roof as it happened in Delhi or Mumbai where most people buy for investment rather than for personal use.
He puts the number of ready-to-move-in apartments at around 40,000 to 50,000. All that could be said is that the sluggishness had reduced the new launches a bit, he added.
The real estate industry in Bengaluru has grown at an uncontrolled pace in last couple of decades.
The influx of unorganised small players now constitute a huge percentage of the total real estate developers in the city. They lack the requisite skill set, organistional set-up and financial resources to complete projects on time and as per the commitments to customers. “This has led to trust deficit about amongst the buyers,” says Omar Sheriff, Director, Skylark Mansions.
Better option
Under such circumstances, it suits people to look into completed projects, or go for reputed builders. “Today the Silicon City is identified as the fastest growing for start-ups and a centre-stage for education. When people come here, they look at investing in ready ones that seem safer as one need not wait for completions, as a bird in hand is better than two in the bush,” according to Mr. Sheriff.
The customer gets to experience the property’s look and feel, its quality, design, area, amenities and other facilities when he is booking. “So, there is no question of belied expectation or promises or delay in possession ,” adds Mr. Sheriff.
