Bengaluru leads in new realty projects

BENGALURU: The number of residential units launched in December and January in Bengaluru was by far the highest among Indian cities, signalling an improvement in sentiments in a sector that has been in a slump for some time.
About 3,400 units were launched in the city in the two months, compared to 2,300-2,400 for Mumbai and Hyderabad, as per estimates by property advisory firm Anarock Property Consultants (formerly Jones Lang LaSalle Residential). In January, launches in Bengaluru, at 1,750, were slightly higher than in December (1,600). Mumbai was at about 600 in December, but shot up to 1,800 in January. Hyderabad was at 1,900 in December, but fell to about 400 in January.

The total number of units launched in the top seven cities of the country dropped 17% to 5,500 in January. Bengaluru and Mumbai were the only ones to witness an increase.

In Bengaluru, 12 projects with 3,400 units were launched in the first two months of the year, which included projects from developers such as Ozone, Prestige, Salarpuria, Sobha and Provident, the affordable housing arm of Puravankara.

120 projects with 16,000 units launched in Bengaluru in 2017

Shriram Properties had launched a project in November. In the coming months, Embassy, Brigade and Godrej are expected to have launches, according to industry sources. Some 120 projects, with 16,000 units, were launched last year in the city. TOI wrote late last year that Bengaluru builders were beginning once again to look at launches.

“Launches were muted in 2017 as consumer sentiment remained low. There was a lot of unsold inventory in the market and whatever launches were made did not get a good response due to Rera (Real Estate Regulation Act) and GST as builders were not sure how to pass the input tax credit to customers,” Prashant Thakur, research head at Anarock, told TOI. “Even this year, it is expected to remain mute,” he said.

The restricted supply addition was mainly due to developers’ focus on project execution and clearing existing unsold inventory. Also, under the stringent Rera norms, new projects can be launched only after securing necessary approvals.

As a result, the previous craze for prelaunches and soft launches has mostly ended. The environment in Bengaluru has been relatively better. The city has been more an end-user-driven market compared to the investor-centric ones like NCR. The number of unsold units in the city stood between 95,000 and 98,000 as of December 2017, compared to 205,000 for NCR and 225,000 for Mumbai.

Nonetheless, indiscriminate launches in Bengaluru stopped, following demonetization, GST and Rera.

Builders took time to understand the implications of Rera, which was introduced to bring more transparency and accountability.

Rera made realtors go back to the drawing board and recalibrate their yet-tobe-launched projects to comply with the rules.