Bangalore's secondary real estate market has undergone recovery in recent times, coming out of the crisis that had set in after demonetization. In the past four months, the sales figures have been showing impressive trends. The brokers dealing with the resale of properties have stated that the size of the deals is smaller. This is a positive indication of recovery for the real estate market in Bangalore after the Government undertook the regulatory measure to curb black money.
According to the brokers, the turnaround began in October. However, it will take time for the market to get back to the conditions prior to demonetization. The sales in the real estate sector have been improving after the RERA (Real Estate Regulatory Act) confusion was resolved and the GST (Goods & Service Tax) was implemented. The brokers said that previously, they used to do one or two large deals every month. With the ticket size coming down to a certain extent after the economic measures were implemented, they are doing two to three deals every month. Evidently, the market is showing signs of recovery.
One of the key features of the real estate market in the contemporary times is the low demand for luxury properties. Previously, the prices of these properties were around INR 1 crore to INR 1.5 crores. However, the clients are looking for resale properties between INR 60 lakhs and INR 80 lakhs. This indicates that the demand for luxury property has decreased after the implementation of the economic measures. Cash plays a pivotal role in resold properties. The sellers want to make a saving on the capital gain tax. The buyers find the cash deals attractive, as they can report a low price to the registration office. This helps them to cut down the burden of stamp-duty. The impact of demonetization on cash has been heavy.
According to the brokers, the market is improving; however, the sales figures are still less. As compared to the sales at the beginning of 2017, the market conditions have improved. The prices of properties in Richmond Town and MG Road are between INR 2 crore to INR 4 crore. Evidently, the market will take another year to recover.
However, the reality companies are not too hopeful for the market to recover. After the implementation of the economic measures, the sales of properties had been severely affected. In fact, 2017 had been one of the worst years for the real estate dealers. However, the implementation of the economic policies ensured transparency in the economy. The number of secondary deals has drastically dropped in Bangalore, and the real estate agents feel that the industry has a long way to go before it can get back to its original health.
Well, 2018 is likely to be a better year for the real estate industry, as compared to 2017, with the buyers getting back their confidence in the industry. The RERA has come to play in the industry, guarding the buyers against corrupt developers. The resale market in Bangalore is slowly recovering from the crisis. The condition of the market is likely to improve in the coming months.
