From IBC World News
Bangalore’s unsold residential inventory stands at 2.2%, total units to be sold inventory of under-construction residential properties stood at 39.8% with total units to be sold in projects at 41.6% as of December 2015.
These were the findings that emerged from a study titled “Analysis of Unsold Residential Inventory in Bengaluru”(upto December 2015), commissioned by The Confederation of Real Estate Associations of India (CREDAI) –Bangalore Chapter to Jones Lang Lasalle (JLL). The report was presented by Mr. Ashutosh Limaye, Head Research & REIS, JLL at Chancery Pavilion here today.
Bangalore therefore continues its classic radial growth of market and this ensures that no one suburb or area becomes overheated.
Limaye observed that a report of this nature serves to make the real estate sector more accountable, mature and transparent. The report was commissioned to ensure that a first step be taken towards creating quality data for good decision-making.
Here is a look at some figures that emerged from this study:
1) Total units for sale: 194993
2) Total Units to be sold in projects: 81042 (41.6%)
3) Total units to be sold inventory (under construction) – 77085 (39.8%)
4)Told unsold units inventory (already constructed ready-to-move in units)- 3957 (2.2%)
1) Total units for sale: 11760
2)Total Units to be sold in projects: 5807 (49.4%)
3) Total units to be sold inventory (under construction) – 5272 (44.83%)
4) Told unsold units inventory (already constructed ready-to-move in units) – 535 (4.55%)
The following observations may be drawn
1. Most sub-markets have approximately 50% of their inventory available, with the exception of North Bengaluru which has a slightly higher figure thanks to the market recently opening up. This, despite stable launches across the city.
2. Bengaluru enjoys a 10% per quarter sales rate currently
3. Units to be sold has been reducing significantly quarter on quarter
4. Bengaluru currently stands 4th in the world as far as absorption of office space is concerned. In fact, in the current financial year it has sold 14 million sqft, where 100 sq is equivalent to the creation of one job. With so many jobs being added to the market, the demand for residential space is poised to grow.
5. South-east Bangalore has the highest number of apartments launched and highest volume of apartments available for sale as well.
6. Compared to other 7 organized realty markets across the country, Bengaluru is on par with Mumbai in terms of demand and the ability to supply and is still considered a good ROI.
7. It is considered to be a better market currently with the significant private equity coming in.
Speaking on the occasion, Mr. Sushil Mantri, past Vice President-CREDAI said, as we are seeing in the media various numbers presented by various IPC are without any authentic data, CREDAI felt it’s the time to appoint a professional independent and reputed agency to conduct the authentic survey and publish genuine data to the media and all its members. This is sincere effort of CREDAI Bengaluru to present authentic third party vetted data, which is absolutely reliable and correct. This report clears the doubt on unsold numbers of over 1 lakh., when the real fact is unsold inventory in the case where above 80% construction work is completed is only 2% and only 40% to be sold apartments are there in Bangalore, which are under-construction at various stages. Bangalore is also the largest office market city in the world in 2015.
Addressing the media and the real estate fraternity, Mr Irfan Razack, Chairman -CREDAI explained that it is important to note is that the study was conducted not just on the properties of CREDAI members, but on the projects of all the developers in the city. The results of this survey are being made public through the media and will be shared through the CREDAI network and outside it as well. The report is accurate as on December 30th 2015.
Commenting on the report, Mr. J.C. Sharma , President CREDAI Bengaluru said, “It is important that we take a scientific approach to the development of the city. A scientific tool such as this study will help developers understand ground realities and plan their launches and projects in a better manner. This creates a win-win situation for the Developer, the consumer as well as the city in general”.
While thanking the media personal for their presence, Suresh Hari, Secretary -CREDAI Bengaluru observed that the market sentiment is apt for newer launches and a great time for aspiring home buyers to pick their choice.
Reasoning and Methodology of the report:
Bengaluru was divided into 8 zones for ease of study. The methodology for the report followed 3 major steps:
Step 1 – A survey with a fixed template was created and circulated among all CREDAI members who were solicited for information on the number of residential projects launched for sale. 65% of the members participated in the survey.
Step 2 – 957 project sites (98% of all projects in Bengaluru) were visited by the JLL team to ascertain whether the information received in the survey matched ground realities. These projects visited, included those of developers outside of the CREDAI realm. Only those projects below 20 apartments in total were not considered for this survey.
Step 3 – During the course of information collection, it was noticed that there were some discrepancies between information received and ground realities. To make things clearer, all information collected was compared against information already on hand at the JLL with its vast portfolio of studies.
All of this information was then analyzed, audited and then compiled into a comprehensive presentation.
Top brass of the CREDAI mentioned that for factual information to come forward, there is a need to clearly differentiate between ‘unsold’ and ‘to be sold’ residential spaces. The first means apartments that have completed construction and are in the market for sale, but have not yet been sold. The second means that residences are still under-construction and will soon be released into the market for sale. The time frame for this release can be anywhere between 3 to 5 years. It is only when this difference is clearly understood, will one be able to understand actual figures on the status of the market.
About CREDAI Bengaluru
CREDAI Bengaluru is an apex body of credible real estate developers, operational in Bengaluru for three decades. It has around 230 reputed developers as its members in the city and 450+ developers across the state. CREDAI Bengaluru safeguards the interests of real estate developers and builders while protecting the rights of buyers and home owners. CREDAI Bengaluru gives voice to its members and is responsible for communicating with Government agencies, trade bodies and other authorities on issues directly affecting the sector.