The Bangalore real estate market saw sales of 15.58 million sq ft of residential space in the first quarter of this fiscal year. This amounts to 13.9% share of the entire real estate market in the country. On the other hand, although Mumbai Metropolitan Region and National Capital Region (NCR) had more sales in terms of residential space – 15.98 mn sq ft and 28.86 mn sq ft respectively – the saw a reduction (rather a fall) in sales by 60% and 57% respectively. Bangalore though, saw a growth of 140% for the quarter ending June compared to similar period last year.
South seems to be emerging as the main real estate center in the country as in 2011-12, the cities in South had 40% home loan disbursals out of a total national disbursals of Rs. 1.95 lakh crores!
One of the interesting factor in the better performance in Bangalore specifically (and South generally) maybe that the buyers in this area are “End Users” as opposed to Investors.
“Bangalore property market is leading both in terms of loan disbursement and sanction. There is a turnaround in the real estate market in Bangalore, which is mainly due to slower growth as compared to markets like Mumbai, Delhi and Chennai,” said VK Sharma, CEO of LIC Housing Finance
Earlier the growth may have been slower compared to other markets.
The price rise, however, for the three citis – Bangalore, MMR, and NCR has been 8%, 8% and 15% respectively. NCR has notched up twice the growth in prices compared to MMR and Bangalore.
There were also fewer project launches in NCR and MMR. NCR was particularly hit by stalling of NOIDA Extension project stalling, specially with the elections going on in UP. Another culprit is high Margin Contribution Requirements.
“Lack of project approvals has restricted new property supply. Additionally, margin contribution requirement from home loan seekers has gone up to 40-45% as loans are now being disbursed excluding stamp duty, registration and other taxes impacting sales,” Lalit Kumar Jain, president, CREDAI