At a time when unsold housing units are piling up and realtors continuing to hold on to the prices, a recent report by Jone Lang LaSalle (JLL)India on cities with unsold inventory is not very encouraging.
In a report released on Tuesday JLL India said that Bangalore has the second-highest unsold inventory among Indian Cities, where the number of unsold housing units stood at around 84,000 in the second quarter of 2015. The city has surpassed Mumbai in the unsold inventory segment; only the National Capital Region (NCR) is ahead of Bangalore.
New project launches along with poor buyer sentiment have resulted in an increase in unsold inventory to more than 84,000 units in Bangalore during April-June period, the survey said.
“Given the rising land costs and expected cash flow issues, developers have been launching new projects in the last few quarters. The situation, however, does not reflect a disconnect between developers and buyers. According to the former, enquiries are happening but buyer sentiment has been affected by macro-economic conditions, causing them to put their buying decision on hold,” the report says.
The report added Bangalore remains a very end-user driven market – quite unlike Mumbai and NCR, which have traditionally been speculative, investor-driven markets. The key characteristic of being a stable market still exists in Bangalore.
In Bangalore, units in the price range of Rs 35-80 lakh sell off quickly. Units with ticket sizes of Rs 1 crore and above take longer to sell. Today, ticket sizes for most projects in the city range from Rs 75 lakh to Rs 1 crore. Also, sales are slow only in relatively less popular locations like western part of Bangalore, Mysore Road, Tumkur Road.
On the other hand, good and stable demand is observed in areas like Sarjapur Road, Bellary Road, Kanakpura Road and Varthur (in Whitefield). The good accessibility from IT parks that these locations enjoy is why they are so popular with buyers.