TNM spoke with real estate developers and consultants in the real estate industry to understand the current situation.
Tejaswi, a 30-year-old science analyst who works for a biotechnology company in Bangalore, is ready to buy a 2 bedroom apartment in a gated community in Kengeri for Rs 42 lakh. He even gets a loan of Rs 10 lakh at an interest rate of 7.5%. “I have been looking to buy a house for a year and it is an opportunity because the prices have come down and there are incentives to get loans at lower interest rates,” he said.
Prior to the lockdown, the developer had quoted a price of Rs 48 lakh for the same apartment, he said, while adding that several apartments he considered options also offer various incentives. Owing to the pandemic, property rates in Bangalore have come down, although real estate developers are reluctant to admit the same.
Micheal, a 37 year old entrepreneur from the city, bought a 2 bedroom house in Cox Town for Rs 1.2 crore. Micheal, who also considered various options, said that in February of this year the price for the same house was 1.9 crore.
“I also looked at the suburbs, including areas like Kengeri. There the price for a 2 BHK apartment in a gated community was Rs 52 lakh. Now the price is the same, but previously there was a floor charge. The higher the floor, the more money it costs. Now it’s gone. I took out a loan to buy the house and the interest rate was also lower, ”Micheal said.
Tejaswi, who had also seen apartments built by the same group, said the apartments were being sold at Rs 52 lakh.
Anuj Puri, chairman of Anarock Property Consultants, said for housing inquiries reached over 60% of what developers saw before the COVID-19 pandemic, with Bengaluru leading the way in the number of people asking to buy a house.
“The city is doing remarkably well with demands reaching 85% of pre-COVID-19 peak levels, Mumbai with 55-65% and Gurugram at almost 65%. Home buyers are gradually coming out and we hope the holiday season will see a significant increase in demand, ”said Anuj Puri, President of Anarock Property Consultants.
Suresh Hari, chairman of the Confederation of Property Developers Associations of the Indian section of Bangalore, said many developers, who are currently building houses or apartments and were halfway before the lockdown, are changing now their plans to adapt to growing demand. In addition, he said that many developers are offering incentives such as providing better quality equipment and keeping the house rate at the same level as before the foreclosure, removing the ground charges for the apartments of great height and even more negotiating room for buyers.
IT / BT crowd and entrepreneurs among home buyers
Suresh said that although in April, May and June there was a drop in property purchase rates in Bangalore, demand is now increasing. “Most people prefer to buy larger luxury homes. The IT and BT crowd gravitates towards buying luxury apartments in suburban areas, ”Suresh said, adding that the pandemic has also brought about a new segment of utility home buyers.
“We have seen a 25% increase in the demand for utility housing. Most of the time, we used to attend to this demand from IT employees, but now there has been a change. Self-employed workers and contractors are looking for utilitarian housing, ”added Suresh.
Anarock data suggests there is a 30-40% increase in the number of home seekers in the city seeking 3BHK homes with an average size of 1,800 square feet. This is mainly due to the concept of working from home, where couples with children look for spaces to work comfortably.
Anuj Puri maintains that there is growing excitement among Bengalurians to buy empty plots of land after the lockdown. He said that while demand is more for fully-built apartments in gated communities, interest in purchasing land is also increasing.
“Although apartments are selling more and more, IT professionals are increasingly interested in buying land on which they can then build a villa / house. Additionally, with the work-from-home option extended until the end of the year and possibly into the next year, many professionals find it a viable option to buy. plots and build their new home and live in open spaces with abundant flora and fauna. Some of the important areas with increasing interest include Sarjapur Road, in Whitefield-Sarjapur Road which extends to Electronic City and Hosur Road, ”added Anuj Puri.
Millennials who want to become owners
Anarock’s investigation during the lockdown indicated that millennials are a huge market for buying property.
“If we look at current trends, the basics of life – Roti, Kapda and Makaan – have become more relevant than ever, even for the youngest people who lived life on the move. The security associated with owning a physical asset during a coronavirus-like crisis, coupled with a growing aversion to high-risk investments, gives new impetus to home buying. On the plus side, “home ownership” among millennials is also gaining in popularity. Their (millennial) preferences are now driven by uncertainties, volatility in stock markets and recent incidents in the financial sector. Many of them now prefer to buy rather than rent houses, ”he added.
Suresh Hari said that even young adults and especially millennials are also considering investing in buying property. “We all wonder if more people are genuinely interested in buying property, as a lot of people are losing their jobs and being made redundant. But millennials buy too. They see it as an essential thing. An investment and an opportunity to have their own home, ”he said.
What real estate developers want
CREDAI and other real estate associations have written to the government of Karnataka to demand that the stamp duty on property registrations be reduced. Stamp duties have been reduced in Maharashtra, which has led to lucrative deals for property buyers. It has also helped the real estate industry in the state.
“Of the total of 33,500 houses ready in Pune and Mumbai currently, nearly 44% are in the affordable category at a price below Rs 40 lakh, followed by 26% in the middle segment at a price between Rs 40 lakh and Rs 80 lakh, 19% in Rs 80 lakh to Rs 1.5 Cr, and the remaining 11% in the luxury segment priced above Rs 1.5 Cr ”, said Anuj Puri.
Suresh argues that if Karnataka follows in Maharashtra’s footsteps, it could give the real estate industry a boost. “Developers have prompted and are adapting to changing times. We really need the government to step up and recognize the importance of the real estate sector. Almost 150 sectors depend on the real estate industry to thrive. If the stamp duty is reduced, more people can be encouraged to buy property and the industry can be revived. In Bengaluru in particular, it can skyrocket because it is one of the big areas where real estate development is the most profitable, ”he added.
TNM tried to contact the secretary of the revenue department (stamps and registrations), but could not get a reaction.