Launch Of New Realty Projects In Bengaluru Witnesses A Fall But Demand For New Inventory Shoots Up

Registration of new real estate projects has seen a drastic decrease in Bengaluru this year amid the Covid pandemic and the slowdown in the economy, although realtors have started seeing green shoots in the past two months.

Data sourced from the Karnataka Real Estate Regulatory Authority show that just 537 applications were submitted to the regulatory body in 2020 (as of October 31) to register new construction projects, compared with 850 applications in 2019 and 1,063 in 2018. These include residential and commercial projects across Karnataka, with majority of them from Bengaluru.

April and May, when strict lockdown rules were in force, saw the least number of applications at 8 and 23, respectively.

Developers attributed the drop in project launches to unsold inventories that were piled up over the last few months. “For a few months, the supply of inventories was more than the demand. Even those with plan sanctions are not launching the projects knowing the market condition. The situation has compelled developers to focus on completion and sale of existing projects and refrain from new launches,” Kishore Jain, president of the Confederation of Real Estate Developers’ Association of India, Bengaluru, told ET.

The real estate body said support from banks, soft interest rates and bargain deals had led to residential real estate transactions picking up since August.
The real estate sector that has been seeing sluggish growth since 2017 was previously expected to pick up this year. “Covid has slowed down the recovery by 1-2 years. The industry may boom in 2022-23,” Damden Developers managing director Damla Mathew said.

He said in Karnataka, amendments to the Land Reforms Act and labour laws were likely to give a fillip to the sector. “While the commercial segment may not revive soon because of the extended work from home culture, residential units will see growth as people working from home want to upgrade their houses,” Mathew said.

Analysts shared the views of real estate developers.

“The sale was virtually zero from the time the first lockdown was announced till mid-August. But since then there has been a growing demand for residential units. Those who are looking to buy houses will not postpone their decision indefinitely. The pent-up demand has now led to sale of unsold units at a much faster pace,” said Amit Bagaria, a strategy consultant.

(Source: Times of India)