Bengaluru registers 22% YoY growth in residential sales; home launches rise by 24% YoY: Knight Frank India

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 Knight Frank India, a premium international property consultant, in their flagship market assessment report “India Real Estate January – June 2021” – that evaluates the performance of residential segment in top eight markets of India – cited that the home sales in Bengaluru witnessed a growth of 22% year-on-year (YoY) to 14,812 units in H1 2021 against 12,177 units in H1 2020. With respect to new launches, Bengaluru witnessed a 24% YoY rise to 13,389 units in H1 2021 from 10,806 units in H1 2020. The healthy increase is mainly due to the lower base effect and less stringent lockdown during the second wave of Covid-19.

The residential sales in Bengaluru started to show resurgence in home sales and launches, especially during Q3 2020 and Q4 2020; which was also carried into Q1 2021. However, as the second wave of the pandemic began unfolding, the momentum dropped, with Q2 2021 registering a sequential drop of 55% in volume of home sales and 21% in new home launches.

With reference to the performance of micro-markets, markets located in the South of the city (Koramangala, Sarjapur Road, Jayanagar, JP Nagar, HSR Layout, Kanakapura Road, Bannerghatta Road) continues to remain popular destination for homebuyers. This location has contributed to 37% of sales and to 35% of launches during H1 2021. Followed by micro-markets located in the East (Whitefield, Old Airport Road, Old Madras Road, KR Puram, Marathahalli), which recorded its share of home sales at  33% and home launches at 32%,  during the same period. The relatively expensive micro-markets in Central Bengaluru saw improved activity, although contributing to a less than 1% share of the overall home sales in the city during H1 2021.

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In terms of the price value-based residential segments, each segment’s share to overall home sales has remained largely the same. Share of sales is greater than INR 50 lakh continued to dominate, recording 48% of the overall sales, marking a decline from 52% in H1 2020. Share of sales for homes costing less than INR 50 lakh and homes costing more than INR 1 crore witnessed a marginal increase from 31% and 17% respectively in H1 2020 to 33% and 19% respectively. Bengaluru market had also seen government intervention on stamp duty cut to boost sales. The scope of benefits offered by the stamp duty cut for homes costing below INR 45 Lakh has had a marginal impact on sales for affordable home units.

With respect to home launches, H1 2021 witnessed a 24% YoY increase.  The Bengaluru market has gained from consumer appreciation of owning a house. This resulted in the continuation of market activities during the second wave. Many developers scheduled project launches which saw better participation from consumers despite the second wave. 

Shantanu Mazumder, Senior Branch Director – Bengaluru, Knight Frank India said“The Bengaluru market had remained resilient through both the waves of Covid-19. Although the loss in life in the second wave has been more severe, the economic impact has been moderate. With awareness of Coronavirus, improving vaccination drive and digital preparedness, both developers and consumers were seen better equipped, compared to the standstill seen during the same period last year.”

With reference to the home price, Bengaluru market is showing stability, it registered a marginal decline of 1.2% YoY with the city now recording weighted average price level of INR 52,959/sq m (INR 4,290/sq ft).