Bangalore's residential real estate market is on a turnaround path. There are new launches and a new sweet spot in terms of pricing for developers. Ashish Puravankara, Managing Director at Puravankara Projects Limited, chats up with Business Today's Goutam Das.
Is there a revival in Bangalore's residential market?
If you see the current launches, one can say there is a revival. We believe that it is on account of various factors. Uncertainty in terms of implementation of new rules, laws, RERA, GST have settled down. Buyers have the comfort that there is an authority who is going to ensure transparency, timely delivery, the quality. Today, with RERA having standardised the definition of carpet area, it is easy for buyers to compare developers and see what they are getting in terms of internal area. All this and our strong brand have ensured sales are good.
When did you first see the signs of a turnaround?
It has been evolving over the last year and a half, incrementally. RERA has refrained the non-serious players from launching projects. The demand is there and brewing. There was a whole portfolio of organised and unorganised players who pitched in for market share. Now, launches have come down. So the branded, organised players are seeing a market share increase.
How long would it take for the oversupply situation to normalise?
The whole world is talking of the shortage of homes in India, in major metros. There is no situation of oversupply. But real estate is the single largest investment you will ever do in your lifetime. It is a long term commitment in terms of home loan. The sense of urgency to take that decision today is not there. People want to be sure, be confident that the job market is going up, salaries are going up. People postpone based on sentiments, interest rates, economy.
Is there a new sweet spot in terms of pricing?
In the premium affordable space, I believe Rs 35-60 lakh is the sweet spot. In the luxury housing space, Rs 75 lakh-1.5 crore is the sweet spot. Both these segments are seeing momentum in the southern markets. We are experiencing the same trend in Hyderabad and Pune. Prices are firming up. When launches come down, it put strains on the supply. So prices will go up. On average, it should be up 3-4 per cent annually, going forward.