Bangalore Leads Real Estate Revival

• Bangalore housing sales rose by 80% in Q1 2019 against Q1 2017, unsold stock declined by 44%
• City’s inventory overhang declined from 42 months in Q1 2017 to 15 months by Q1 2019 end; new supply rose by a mere 39%
• 31% NRIs see Bangalore as most preferred city for investment – ANAROCK Consumer Sentiment Survey

As per ANAROCK data, Bangalore has been one of the most active residential markets over the last two years with overall housing sales rising by 80% in Q1 2019 against the same period in 2017 while the overall unsold stock declined by a whopping 44% during the same period – the maximum among top cities.

Housing Sales (Units) – Top 7 cities

City	Q1 2017	Q1 2018	Q1 2019	% Change in 2yrs
NCR	7,290	9,070	13,740	88%
MMR	13,470	12,300	24,010	78%
Bangalore	8,660	11,690	15,580	80%
Pune	7,595	6,850	12,340	62%
Hyderabad	3,075	4,050	5,400	76%
Chennai	2,660	2,420	3,430	29%
Kolkata	3,260	3,420	4,020	23%
Total	46,010	49,800	78,520	71%

Source: ANAROCK Research

Unsold Stock (Units) – Top 7 cities

City	Q1 2017	Q1 2018	Q1 2019	% Change in 2yrs
NCR	2,19,998	2,00,476	1,80,999	-18%
MMR	2,30,805	2,23,192	2,22,327	-4%
Bangalore	1,18,695	91,633	66,819	-44%
Pune	1,06,242	93,321	92,585	-13%
Hyderabad	32,182	26,924	25,401	-21%
Chennai	31,034	26,800	30,575	-1%
Kolkata	50,544	51,049	46,452	-8%
Total	7,89,500	7,13,394	6,65,157	-16%

Source: ANAROCK Research

With rising sales across the city backed by rising consumer demand, Bangalore’s inventory overhang declined from 42 months in Q1 2017 to merely 15 months as on Q1 2019 end. At any given point, an inventory overhang within 18 months is considered a healthy market.

Inventory Overhang – Top 7 cities

Cities	Q1-2017	Q1-2018	Q1-2019
NCR	90	66	45
MMR	54	55	35
Bangalore	42	26	15
Pune	44	40	28
Hyderabad	39	23	15
Chennai	39	36	30
Kolkata	48	46	35
PAN India	50	42	30

Source: ANAROCK Research

Bangalore’s new supply during the last 2 years remained largely limited in comparison to other prominent cities like Pune, Chennai and MMR that saw their new launches increase by whopping 279%, 118% and 79% respectively. Bangalore saw its new supply increase by merely 39% from Q1 2017 to Q1 2019. Builders cautiously focused on releasing less new supply in the market and instead focused on sale of old projects. This invariably led to increased housing sales.

New Supply (units) across Top 7 cities

City	Q1 2017	Q1 2018	Q1 2019	% Change in 2 yrs
NCR	6,860	4,540	8,030	17%
MMR	15,000	9,490	26,850	79%
Bangalore	6,520	7,320	9,070	39%
Pune	4,630	2,750	17,520	279%
Hyderabad	3,960	3,680	4,850	22%
Chennai	1,460	2,720	3,180	118%
Kolkata	6,580	6,470	1,000	-85%
Total	45,010	36,970	70,500	57%

Source: ANAROCK Research

Bangalore saw the highest jump in average property prices in the last two years at about 6%. The current average prices in the city are INR 4,950 per sq. ft.

City	INR/sq. ft. Q1 2017	INR/sq. ft. Q1 2018	INR/sq. ft. Q1 2019	% Change in 2 yrs
NCR	4,625	4,520	4,565	-1%
MMR	10,480	10,410	10,550	1%
Bangalore	4,690	4,850	4,950	6%
Pune	5,300	5,410	5,480	3%
Hyderabad	3,950	4,100	4,172	6%
Chennai	4,900	4,910	4,915	0%
Kolkata	4,370	4,430	4,375	0%
Total	5,474	5,519	5,572	2%

Source: ANAROCK Research

Interestingly, if we deep-dive into ANAROCK’s unsold inventory data, the city saw maximum decline in the premium segment (priced within INR 1.5 Cr to INR 2.5 Cr) comprising 49% decline within a year – from 6,370 units in Q1 2018 to 3,260 units in Q1 2019. This was followed by mid-segment properties (INR 40 lakh – INR 80 lakh) that saw yearly decline of 28% during the same period.

City	Q1 2018	Q1 2019	% Decline/Rise
	INR 1.5 Cr – 2.5 Cr	INR 1.5 Cr – 2.5 Cr
NCR	10,336	9,590	-7%
MMR	25,758	23,929	-7%
Bangalore	6,365	3,255	-49%
Pune	2,041	1,936	-5%
Hyderabad	1,732	1,912	10%
Chennai	846	1,265	50%
Kolkata	1,219	769	-37%
Total	48,297	42,656	-12%

Source: ANAROCK Research

• As per ANAROCK consumer sentiment survey, Bangalore, which is largely known for being an end-user driven market, saw a reverse trend. The share of respondents looking to invest in property in the IT capital jumped to 44% from the previous 25% in H2 2018.
• As per the survey, for 31% NRIs, Bangalore was the most preferred city for investment. The survey findings also pointed out that a whopping 67% buyers in Bangalore were happy with the builder from whom they bought their property and if given a chance they will again buy from the same builder. This coincides with its major USP wherein buyers have far less fear for project completion in comparison to other prominent cities.

Unprecedented commercial growth backed by burgeoning start-ups over the last few years has inevitably raised the disposable incomes of the IT/ITeS professionals and new entrepreneurs. It is this new and young population that is driving housing sales in the city. Much to their delight, prices were also fairly attractive and couldn’t possibly get lower than this. Alternately, to clear their unsold stock, developers also offered attractive deals and discounts to them. Therefore, many felt it to be the most opportune time to buy a property since it won’t be long enough when developers would hike property prices due to better overall housing sales and buyer sentiments.