Real es­tate mar­ket slow­ing down in Ben­galuru: ICRA

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Bidya Sa­pam bidya.s@livemint.com

Mum­bai: Faced with slow sales and weak con­sumer sen­ti­ments, real es­tate de­vel­op­ers in Ben­galuru are slow­ing down on new project launches, par­tic­u­larly in the pre­mium seg­ment, and re­con­fig­ur­ing spec­i­fi­ca­tions by low­er­ing unit sizes to im­prove af­ford­abil­ity.

As per a study by rat­ing agency ICRA, Ben­galuru real es­tate mar­ket has wit­nessed a slow­down in de­mand and sales vol­umes. “The fo­cus on af­ford­able / mid-cat­e­gory of projects vis-à-vis the pre­mium seg­ment is sup­ported by the marked di­ver­gence in pace of in­ven­tory ab­sorp­tion in both the seg- ments,” it said.

“The Ben­galuru res­i­den­tial mar­ket has re­mained sub­dued in the last two years on ac­count of mod­er­ate de­mand, weak con­sumer sen­ti­ments and de­mand­sup­ply mis­matches in cer­tain prod­uct seg­ments,” said K Ravichan­dran, group head, ICRA.

How­ever, growth in com­mer­cial of­fice space off-take and re­cent reg­u­la­tory de­vel­op­ments should sup­port im­prove­ment in long-term de­mand pro­file in the res­i­den­tial seg­ment in Ban­ga­lore though the near term out­look is chal­leng­ing, he said.

On the com­mer­cial side, the city has seen the high­est level of ab­sorp­tion of of­fice space across the country for the fourth year run­ning Va­cancy levels have fallen to around 10% by end of 2016 as supply fails to catch with the de­mand. On the supply side, around 30 mil­lion sq ft of stock is un­der con­struc­tion in the city and is ex­pected to be com­pleted over 2017-2019, the study said.

The rat­ing agency said its out­look on the In­dian res­i­den­tial real es­tate sec­tor re­mains neg­a­tive due to sub­dued de­mand on ac­count of weak con­sumer sen­ti­ment and low af­ford­abil­ity levels. In ad­di­tion to these fac­tors, the de­mon­eti­sa­tion ex­er­cise in third quar­ter of last fi­nan­cial year of FY2017 has fur­ther sup­pressed de­mand for res­i­den­tial real es­tate as prospec­tive cus­tomers pre­ferred to wait and ob­serve the im­pact of the de­monet is at io non real es­tate prices

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