City’s unsold residential, office spaces running to 1,05,359 units as of June 2014
The significant build-up in unsold inventory and the availability of a large number of ready to move-in apartments in Bangalore have resulted in constricting price rise in the first half of 2014 in the city’s real estate market, according to Knight Frank India.
The Global Property Consultant launched ‘India Real Estate Outlook’, its half-yearly analysis report of residential and office market in six metros (Mumbai, Pune, NCR, Bangalore, Chennai and Hyderabad) for January–June 2014.
In what seems to be a noticeable fact in an otherwise “healthy market” is Bangalore’s unsold inventory running to 1,05,359 units as of June 2014.
“The piled-up stock relates to unsold ready-units, unsold under-construction and unsold units that were launched for the last two years, which is expected to take nearly seven quarters for its absorption,” said Satish B.N., Executive Director, South, Knight Frank.
Compared to Mumbai, which has the highest 2,13,742 in its two-year unsold inventory and NCR with 1,67,847 units, Bangalore’s market is still termed “very healthy”, said Mr. Satish. “Bangalore’s market is relatively much larger and is expected to sell nearly 60,000 units this year,” he said.
The average price increase has been 11 per cent, which is controlled appreciation in the last one year, according to the report. “Adequate supply, improved infrastructure and sops announced in the budget seems positive towards the market seeing a 15 per cent increase in the next few quarters,” explained Mr. Satish.
Bangalore witnessed new launches of 35,545 units from January–June this year, while the next six months is expected to get an additional 36,568 units. Mr. Satish explained that south Bangalore, covering Koramangala, Sarjapur Road, Jayanagar, J.P. Nagar, Electronics City, Kanakapura Main Road and Bannerghatta Road, has seen the maximum unit launches with 45 per cent in the last six months.
Nagaraj R., president, CREDAI-Karnataka, said, CREDAI-Bangalore construction capacity is around 40,000 units per year and 30,000 get sold.
“The surplus is more in the above Rs. 1-crore category that at best touches about 10,000 units. There is no stock in the Rs. 65-lakh category as of now. The unsold under-construction units would touch about 20,000 units,” he said.