Bengaluru (also Bangalore) took a severe hit during the September quarter when real estate developers cut down their residential property launches due to violent protests over the release of Kaveri water by Karnataka as directed by the Supreme Court. A sustained demolition drive by the city's civic body BBMP against encroachments added to the slowdown, according to Colliers India.
At a mere 4,300 launches during the September quarter, the drop was 63 percent in comparison to the June quarter, said the real estate consultancy in its quarterly report.
"This dip in the new launches was primarily attributed to the momentary civil unrest over Kaveri water issue between the state of Karnataka and Tamil Nadu. Also, many projects could not initiate construction and remained in the pre-launch stage due to delays in getting necessary approvals from government departments in the wake of Bruhat Bengaluru Mahanagar Palike's (BBMP) recent city-wide initiative to tackle the encroachment of storm water drains (rajkaluves) and the lake beds," wrote Divya Grover, senior manager, Bengaluru, Colliers India.
Worse, the outlook is not-so-encouraging either for the December quarter because of the continuing oversupply in the primary market, she added.
There is some ray of hope for developers, though, given factors that could lure buyers. "The festive season has triggered a slew of soft launches in the market and developers were offering freebies such as gold coins, lucky draw for car, no pre-EMI for first two years (as part of 20:80 schemes) and buyback plans to gain traction among prospective buyers. Demand remained concentrated in locations near employment hubs for mid-segment products ranging in the price bracket of Rs 60 lakh to Rs 65 lakh," Grover wrote.
The overall launches across six cities consisting of Mumbai, Gurugram (Gurgaon), Noida, Chennai, Bengaluru and Pune was slightly less than 25,000 units during the quarter, the report said.
The forthcoming months could pick up momentum on account of a slew of factors, according to Surabhi Arora, senior associate director, Colliers India.
"The residential market appears to be coming out of the cycle of 'low confidence, low investment'. Several factors such as the strong office market that indicate robust employment scenario, the festive season and lowering interest rates are likely to support housing market in coming months. We expect residential market to witness growth in most cities," she said in the report.