Tejaswi, a 30-year-old scientific analyst, who works for a biotech company in Bengaluru is all set to buy a 2-bedroom apartment inside a gated community in Kengeri for Rs 42 lakh. He is even obtaining a loan of Rs 10 lakh at an interest rate of 7.5%. “I have been looking to buy a house since the last one year and this is an opportunity as the prices have reduced and there are incentives to obtain loans at lesser rates of interest,” he said.
Before the lockdown, the developer had quoted a price of Rs 48 lakh for the same flat, he said, while adding that several apartments that he had viewed as options, are also offering various incentives. Due to the pandemic, property rates in Bengaluru have dipped, although real estate developers shy away from admitting the same.
Micheal, a 37-year-old entrepreneur in the city, bought a 2-bedroom house in Cox Town for Rs 1.2 crore. Micheal, who has also been considering various options, said that in February this year, the same house was priced at 1.9 crore.
“I looked at the suburbs also, including areas like Kengeri. There the price for a 2 BHK flat in a gated community was priced at Rs 52 lakh. Now, the price is the same but earlier, there were floor charges. The higher the floor, the more money it cost. Now, that is gone. I took a loan to buy the house and the interest rate was also lower,” Micheal said.
Tejaswi, who had also viewed flats constructed by the same group corroborated said that the flats were being sold at Rs 52 lakh.
Anuj Puri, Chairman of Anarock Property Consultants says that for housing, enquiries have reached over 60% of what developers saw before the COVID-19 pandemic, with Bengaluru leading in the number of people enquiring to buy a house.
“The city is doing remarkably well with enquiries reaching 85% of the peak pre-COVID-19 levels, Mumbai with 55-65% and Gurugram at nearly 65%. Homebuyers are gradually coming out and we hope the festive season will see significant increase in demand,” said Anuj Puri, Chairman of Anarock Property Consultants.
Suresh Hari, Chairman of the Confederation of Real Estate Developers Association of India’s Bangalore chapter, said that many developers, who are currently in the process of constructing houses or apartments and were halfway through before the lockdown, are now altering their plans to accommodate the growing demand. In addition, he said that many developers are offering incentives like providing better quality fixtures and keeping the rate of the house the same as it was before the lockdown, removing floor charges for high rise apartments and even giving more room for buyers to negotiate.
Suresh said that although in April, May and June there was a dip in the rates at which properties were bought in Bengaluru, the demand is growing now. “Most people prefer to buy larger luxury houses. The IT and BT crowd are gravitating towards buying luxury apartments in the suburban areas,” Suresh said, while adding that the pandemic has also resulted in a new segment of buyers for utility housing.
“We have seen a 25% increase in demand for utility housing. Mostly, we used to witness this demand from the IT employees but now there has been a shift. Self employed persons and entrepreneurs are looking for utility housing,” Suresh added.
Anarock’s data suggests that there is a 30-40% increase in property seekers in the city scouting for 3BHK houses with an average size of 1800 sq ft. This is primarily due to the work from home concept, where couples with children are looking for individual spaces to work comfortably.
Anuj Puri maintains that there is growing excitement among Bengalureans to buy empty plots of land, post the lockdown. He said that although the demand is more for fully constructed apartments in gated communities, the interest for purchasing land is also growing.
“Although apartments are selling more, there is a growing interest by the IT professionals to buy plots on which they can later construct a villa/house. Moreover, with extended work from home option until the end of the year and possibly till next year, many professionals consider it a viable option to buy plots and construct their new abode and live in open spaces with ample flora and fauna around. Some of the prominent areas with increasing interest include Sarjapur Road, at Whitefield-Sarjapur Road that further extends up to Electronic City and Hosur Road,” Anuj Puri added.
Anarock’s survey conducted during the lockdown indicated that millennials form a huge market for buying properties.
“If we look at the current trends, the basics of life – Roti, Kapda and Makaan – have become more relevant than ever, even for the younger lot who lived life on-the-go. The security associated with owning a physical asset during a coronavirus-like crisis coupled with rising aversion to high-risk investments is giving home buying a new impetus. In another positive, ‘home ownership’ among millennials is also gaining preference. Their (millennials) preferences are now dictated by the prevailing uncertainties, stock market volatility and recent-past financial sector incidents. Many of them now prefer buying over renting homes,” he added.
Suresh Hari said that even young adults and mostly millenials are also looking at investing in buying properties. “We all wonder whether more people are actually interested in buying properties since many people are losing jobs and getting laid off. But millennials are also buying. They see it as an essential thing. An investment and an opportunity to have a home of their own,” he said.
CREDAI and other real estate associations have written to the Karnataka government demanding that stamp duty on property registrations be reduced. The stamp duty charges were reduced in Maharashtra, which has led to lucrative offers for property buyers. This has also helped the real estate sector in the state.
“Of the total 33,500 ready homes in Pune and Mumbai presently, nearly 44% are in the affordable category priced less than Rs 40 lakh, followed by 26% in the mid-segment priced between Rs 40 lakh to Rs 80 lakh, 19% in Rs 80 lakh to Rs 1.5 Cr price bracket, and the remaining 11% in the luxury segment priced above Rs 1.5 Cr,” Anuj Puri said.
Suresh maintains that if Karnataka follows in the footsteps of Maharashtra, it could provide an impetus for the real estate sector. “Developers have been incentivising and adapting to changing times. We really need the government to step up and acknowledge the importance of the real estate sector. Neary 150 sectors depend on the real estate industry to thrive. If stamp duty is reduced, more people can be incentivised to buy properties and the industry can be revived. In Bengaluru especially, it can soar as it is one of the major areas where property development is the most profitable,” he added.
TNM tried to contact the Secretary of the Revenue Department (Stamps and Registrations), but was unable to obtain a reaction.