The real estate research firm Cushman & Wakefield, which has merged with DTZ recently, unveiled a gloomy picture of Bangalore property market as the new year dawned upon. The launch of new units drastically came down compared to previous years as home sales have hit the bottom level, it said.
New unit launches in Bangalore plunged to 62% to 15,600 in 2015 due to high inventory, with few getting sold, said Cushman & Wakefield said on Monday. “New launches in 2015 were concentrated mainly in few submarkets including far-south (Electronic City) and south-east (Sarjapur, Outer Ring Road) submarkets. Approximately 47% of the new unit launches in 2015 were witnessed in those areas,” said Shveta Jain at Cushman.
In IT-cedntric areas of Electronic City and Whitefield, builder have slashed the sale price in mid segment 2BHK houses in Rs.50 to Rs.70 lakh range by 7% despite increase in the basic sale price to 19%.
“There is a shortfall and the markets are depressed but if you compare with the other metros, Bangalore had the opportunity of launching hundreds of projects and selling them off. I think that is still commendable,” said Farooq Mahmood of property consultancy Silverline Realty.
The research found many builders changed their segment in the last two years, with about 83% of new launches being in the mid-segment, priced beyween Rs 40 lakh and Rs. 80 lakh, for 2BHK houses with areas ranging between 850 sqft and 1,600 sqft. The properties of Rs 1 crore range no longer sold now, it observed.
Nearly, 500,000 new residential units were launched in top eight cities of India between 2012 and 2014 and majority of the units (60%) were added in the mid segment while 16% were added in the high-end segment. Only 23% units in the affordable segment were built.
Considering the increasing population and rapid urbanization in India, the demand for housing units is likely to continue increasing in the future as well, it said. As per government estimates in 2012, there was a shortage of 18.78 million urban housing units in India. Cushman and Wakefield estimated that total additional housing demand of 2.15 mn is likely to arise in the top eight cities between 2015-18.
Existing under construction and planned delivery pipeline by 2018 is only around 1 mn units across top 8 cities, indicating a massive demand-supply mismatch. 56% of the total demand-supply gap across top eight cities is expected to arise in the affordable segment followed by 25% in the mid segment.