The second wave of the COVID-19 pandemic and the ensuing lockdown during the April to June quarter (Q2) dented the demand for residential real estate in Bengaluru by more than 25%, according to a report by Magicbricks PropIndex. However, while the demand has decreased, the prices have not. Prices continued to hover at the levels and went up by 1% during April and June this year, the report showed.
The report stated that the residential market has shown an increased preference for premium properties -- those that cost above Rs 7,000 per sqft, holding a market share of 39% in Q2 2021, as against 36% in Q1 2021. For premium houses, areas that saw an increase in property prices are Rajaji Nagar, RMV Extension Stage 2, Haralur Road, JP Nagar Stage 6, and Konanakunte.
Overall, demand was mostly concentrated for 2 and 3 BHK homes, together contributing to 88% of the total searches in the city. The 3BHK configuration dominated the residential market accounting for around half of the total consumer preference. "3BHK configuration dominates the residential market as it accounts for around half of the total demand (consumer preference) even as the share of 2BHK has come down by 4% QoQ in Q22021," the report said.
Prices for properties that are ready-to-move saw a marginal decline in prices of 0.3% between April and June this year as compared to the same period last year. As per the report, property buyers favoured under-construction properties, and prices for such properties were up 2.9% in Apr-Jun as compared to the Jan-March period this year, and up 3.1% compared to Apr-Jun last year.
The PropIndex Report also revealed that the inauguration of the green line metro service from Yelachenahalli to Silk Institute in Q1 2021, had increased the demand for the properties in the price range Rs 5,000-6,000 along Kanakapura Road in Q2.
Demand for homes was found to be concentrated in localities such as Whitefield, Sarjapur Road, and Bellary Road, which the report stated have consistently ranked high in terms of searches in recent quarters.
â€śUnlike the first wave, the recovery in demand for residential real estate has been faster in the second wave. The residential markets of Bengaluru, Chennai, Thane, Noida-Greater Noida, Kolkata, and Delhi witnessed price corrections ranging from 1%-2.3% during the quarter that also saw rising medical expenses and debt. Bengaluru is one of the few markets in the country where the premium segment continues to do well even during restrained real estate activity,â€ť said Sudhir Pai, CEO, Magicbricks.
For home buyers, he added that schemes given by the developers can convert people (who might still be considering the option) into potential buyers. â€śSchemes by the developer such as flexible payment offers, no Pre-EMI options, and low booking amount, can potentially convert fence-sitters into potential buyers. Further, the state governmentâ€™s assistance to property taxpayers during the lockdown that extended a 5% property tax rebate till June 30, brought in positive sentiment in the city,â€ť he added.