BENGALURU: Launch of new residential units in Bengaluru slumped 42% year-on-year in 2106 due to delays in securing completion ceritificates and muted demand in the high-end and luxury segment, according to a report by property consultancy Cushman & Wakefield. The city saw launch of 17,300 units last year as against 30,000 in 2015.
It took more time in 2016 to secure completion certificates because of the city municipal corporation, Bruhat Bengaluru Mahanagara Palike or BBMP’s, clampdown on land encroachment. “Post the demonetisation, markets have witnessed a slow uptake of residential properties on account of price and value mismatch,” said Anshul Jain, managing director-India at Cushman & Wakefield. “Consequently, developers are also relooking at their strategies to create better value for home buyers.”
Further, several developers postponed new launches in anticipation of new rules under the Real Estate (Regulation and Development) Act or RERA.
“The RERA rules will further slow project execution and kill the industry,” said a former bureaucrat who is now associated with a Bengaluru-based builder.
The only segment that saw a surge was value housing where project launches jumped 21% year-on-year to 6,460 units in 2016. Sarjapur and Bommasandra areas of the city accounted for 34% of total value housing launches in south and south-east as they offered relatively smaller units. “We are now focusing on commercial property as there is no sales in residential. Many builders have deferred new launches by a quarter at least as there is too much uncertainty,” a Bengaluru-based builder said on condition of anonymity.
According to the report, the average unit size declined 19% to 1,000 square feet in 2016, while the average launch price fell 5% to Rs 3,800 per sq ft.
Credits ET Realty