Residential property demand plunged in Bangalore

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Rajaji Nagar, RMV Extension Stage 2, Haralur Road, JP Nagar Stage 6 and Konanakunte are the major localities that witnessed an increase in property prices during the April to June quarter.

The second wave of the COVID-19 pandemic and subsequent lockdown in the April to June quarter (Q2) caused demand for residential real estate in Bangalore to drop by more than 25%, according to a report by Magicbricks PropIndex. However, while demand has fallen, prices have not. Prices continued to hover at the levels and rose 1% in April and June this year, according to the report.

The report said the residential market showed an increased preference for premium properties – those costing more than Rs 7,000 per square foot, holding a market share of 39% in Q2 2021, compared to 36% in Q1 2021. For high-end homes, areas that have seen an increase in property prices are Rajaji Nagar, RMV Extension Stage 2, Haralur Road, JP Nagar Stage 6 and Konanakunte.

Overall, demand was mostly concentrated on 2 and 3 BHK homes, together contributing 88% of the total searches in the city. The 3BHK configuration dominated the residential market, accounting for about half of the total consumer preference. “The 3BHK configuration dominates the residential market as it accounts for around half of total demand (consumer preference) even as 2BHK’s share declined by 4% QoQ in Q22021,” the report said.

Prices for move-in ready properties saw a marginal price decline of 0.3% between April and June this year compared to the same period last year. According to the report, real estate buyers favored properties under construction, and the prices of these properties increased by 2.9% in April-June compared to the period January-March this year, and by 3.1 % compared to April-June last year.

The PropIndex report also revealed that the inauguration of Yelachenahalli Green Line metro service to Silk Institute in the first quarter of 2021, has increased demand for properties in the price range of Rs 5,000-6,000 along Kanakapura Road in the second quarter.

Demand for housing has proven to be concentrated in localities such as Whitefield, Sarjapur Road and Bellary Road, which according to the report have consistently ranked high in terms of searches in recent quarters.

“Unlike the first wave, the recovery in residential property demand was faster in the second wave. The residential markets of Bengaluru, Chennai, Thane, Noida-Greater Noida, Kolkata and Delhi saw price corrections ranging from from 1% to 2.3% during the quarter, which also led to an increase in medical expenses and debt.Bengaluru is one of the few markets in the country where the high-end segment continues to do well even during restricted real estate activity,” said Sudhir Pai, CEO of Magicbricks.

For homebuyers, he added that programs offered by developers can convert people (who may still be considering the option) into potential buyers. “Developer programs such as flexible payment offers, no pre-EMI options and low booking amount can potentially convert fence keepers into potential buyers. Additionally, the state government’s assistance to property taxpayers during the lockdown, which extended a 5% property tax refund until June 30, has generated positive sentiment in the city,” he said. -he adds.

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