A sneak peek into Residential Report H1 2016

Admin July 11, 2016, 11:14 AM Bengaluru Residential Report
A sneak peek into Residential Report H1 2016

A brief data analysis of current Bengaluru Residential Real Estate market throws light on various important metrics of essential real estate analysis for builders and developers. It covers various updated Government policies to 1500 buyer preference analysis that give you a clear idea of the existing and upcoming market.

The real estate residential market in Bengaluru was reluctant to show any progress in the times preceding 2016. It hasn’t revived either in the first half of 2016, it has witnessed a dip in its absorption trend and reached an all-time low Sales Velocity of 1.02%, i.e. a 7.7% decline in the first half of 2016 in comparison to 2015’s second half.

a negative result of the declining Sales Velocity, Months Inventory is at its highest in the first half of 2016 when compared to the periods following December 2012. An increase of 6.3% is noticed in the Months Inventory of the first half of 2016 when compared to the second half of 2015. The average time required to sell the existing primary residential stock has increased from 31 months in H2 2015 to 33.07 months in H1 2016.

As an outcome of declining Sales Velocity and ever increasing Months Inventory levels, the Average Capital Value of residential development across Bengaluru would have decreased, as a layman would analyze. The truth remains that the average Capital Value remains unchanged in H1 2016 as it remains the same in H2 2015, i.e. INR 5334 per sq. ft.

Bengaluru’s residential market had a net addition of 18,129 units in H1 2016 across developments. This net addition is 40% lower when compared to the net addition of H2 2015, which stood at 29,920 units. Considering the net addition, the total inventory in H1 2016 stood at 125,738 units across developments out of which the incremental sale of 20,169 units (16% of inventory) took place in H1 2016. Incremental Sales in H1 2016 has declined by 17% in comparison to H2 2015.

Apartment development accounts to 81% of incremental sales, whereas Plot, Villa and Row House development sums up to 15.1%, 3.5% and 0.1% respectively of incremental sales in H1 2016.

Apartment development in Bengaluru has a total residential development spread of 399.1 Mn sq. ft. of which unsold inventory stood at 133.1 Mn sq. ft. valuing INR 72,250 crores. The size of unsold inventory of Plot, Villa and Row House stood at 21.8, 17 and 1.5 Mn sq. ft. respectively in H1 2016.

Residential development in its various development forms is spread across Bengaluru- North to South and East to West. The quadrant which witnessed the largest addition to its already existing inventory in H1 2016 is the North-East quadrant. 8,127 units were added to its already existing stock. Also the North-East quadrant performed better than its counterparts in H1 2016 at an incremental sales of 7,569 units i.e. 16.5% sales from the total inventory available. The South-East quadrant follows the North-East quadrant both in terms of large net addition of 7,631 units in H1 2016 and a total incremental sale of 14.7%.

The largest stake holder in Bengaluru’s residential market is the Budget homes category priced between INR 30-60 Lakh. The Budget homes category has a total supply of 181.9 Mn sq. ft. in H1 2016 as compared to H2 2015(168.5 Mn sq. ft.), 7.3% increase.

The poor performance of residential market across Bengaluru has resulted in the form of a drastic decline in the number of new launches in Apartment segment in H1 2016 when compared to the previous periods. There is a 49.7% dip in the size of new launches in H1 2016 from the second half of 2015.

In H1 2016, the Apartment development witnessed new launches to the extent of 11.41 Mn sq. ft. i.e. 9,138 units to its already existing large inventory. The incremental sale of the existing inventory and the new launches combined accounted to 16,355 units in H1 2016. The average price of Apartment segment in the new launch category has decreased from INR 4,998 per sq. ft. in H2 2015 to INR 4,799 per sq. ft. in H1 2016.

While most of the locations have faced decline in its value over the first half of 2016. Hosur road and Devanahalli have appreciated the most in terms of value in H1 2016 and stands at INR 18.5% rise and 10.8% rise respectively.

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