With regards to the real estate market in the entire country, the Bangalore real estate market has been very strong and the projects are in very good demand, as termed by the market research companies as well as CREDAI Bengaluru.
While speaking on the subject, Mr. C.N. Govindaraju, President, CREDAI Bengaluru has stated that based on the current rate of launches and the annual absorption trend, the residential market in Bangalore seems to be in a balanced state. Also, the city is supported by social and business infrastructure and poised to witness 0.78 million sq. ft. of mall supply and 1,742 rooms of star category hotel inventory in 2013 along with residential and commercial developments.
According to him, the first half year of 2013 Bangalore has attracted good amount of private equity investment in residential and commercial sector.
While speaking on the availability of the stocks and unsold stocks, Mr. C.N. Govindaraju, President, CREDAI Bengaluru clarified that housing can be divided into following categories:
1. Units in completed projects, and
2. Units in under-construction projects.
The sum total of units yet to be sold would be in completed projects and the units in under-construction projects cannot be considered as unsold stock.
The units in completed projects can be termed as unsold, but the units which are yet to be sold in under-construction projects cannot be categorized as unsold for the following reasons:
1. Units in projects under-construction are meant to be consumed in the next 3-4 years, as the projects normally take 3 – 4 years for completion.
2. The units in under-construction projects are not for sale at once on the day of the launch. Developers sell them in phases depending on the schedule of completion.
Hence, the units that are not for sale cannot be categorized under “Unsold”.
Coming to the case specific to Bangalore, the annual absorption of number of units is 26000 to 28000. As such, it is possible that the units under-construction can be in the range of 1,20,000 which may get absorbed in the course of the next around 4 years.
Mumbai has an annual absorption of about 80000 units, Pune about 30000 and Delhi about 1,00,000.
In CREDAI”s estimate, the number of units unsold in the projects completed in Bangalore would be in the range of 700 units. Bangalore is one of the major markets in the country along with other major markets such as Delhi, Mumbai, Pune and Chennai.
While responding to the scheme of 75:25 and 80:20 Mr. C.N. Govindaraju also expressed that: The scheme of 20:80 is hardly used by few developers across the country and very few in Bangalore. The control on this will not affect the market flow of working capital, since builders have resource to working capital. Since dependency is not there, this will not affect the demand. The demand for home loan for individual buyers is available and banks are encouraging them to borrow. If buyers have eligibility, the availability of home loan is not an issue.
To summarize, Bangalore’s residential sector continues to remain strong and has a positive outlook for real estate development activity.