Fewer launches of residential projects in Bengaluru, which sent rentals into a frenzy, are now pushing prospective homebuyers to scout for options in the resale market.
Among such buyers are those looking for bigger homes or employees returning to the city as offices open up after the pandemic. The cost of resale units starts at Rs 1 crore and can go up to Rs 10 crore, brokers said.
Most ready-to-move-in apartments were sold during COVID-19 and it may take two to four years for new housing projects to be completed, experts said.
East, north and CBD
Demand for two- and three-bedroom apartments in the resale market has increased by almost half over a year, said Saurabh Garg, co-founder of NoBroker.
Most apartments available for resale are located in the eastern and northern parts of Bengaluru, with significant demand spilling into the central business district.
Sunil Singh, realtor at Realty Corps, said several apartments in Prestige Shantiniketan and Brigade Metropolis in Whitefield are going for resale at Rs 12,000 per square foot, up from Rs 8,000 per sq. ft before the pandemic.
In Godrej Woodsman Estate in Hebbal, north Bengaluru, two-bedroom apartments that sold for Rs 1.25 crore before the pandemic are currently up for resale at Rs 1.5 crore.
Apartments in Prestige Acropolis in Koramangala, towards the CBD area, are selling at Rs 3 crore each from Rs 2-2.5 crore previously.
Spike in demand
Almost 23 percent of the apartments available in the city are ready for people to move in, according to Anarock data as of March, and another 15 percent will be ready within a year, while the rest will take about three years or more.
As offices reopen, most homebuyers are looking for apartments in the CBD area or close to the IT corridor in Whitefield, Sarjapur Road, Hebbal and adjoining areas, which are home to many IT and ITES companies.
Additionally, most primary residential construction around IT parks has possession dates for next year and beyond, Garg added.
With the shortage, local brokers said inquiries for resale apartments have tripled compared to the first quarter of this year. Before the pandemic, the resale bracket in Bengaluru was in the premium luxury segment of Rs 5 crore and above. However, experts said the resale market has widened to a range of Rs 1 crore to Rs 10 crore.
Most of the apartments for resale in the CBD area, situated across prime areas like MG Road and Jayanagar, are 10-20 years old, while contemporary suburbs like Whitefield and Hebbal are five years old.
"Vacant land/plots in the prime areas are about Rs 30,000-40,000 going up to Rs 60,000 per sq. ft. Thus, resale apartments are better," Singh added.
Healthy returns
Investors who purchased apartments five to 10 years ago and held them to get higher rent or benefit from appreciation now find it lucrative to sell their assets.
"They can today easily exit with almost double returns, especially when the demand and supply mismatch in the city's real estate sector has appreciated housing prices by 30 percent in the last two years," Singh added.
Additionally, some families are looking at moving to larger, more spacious homes, opening new avenues in the resale market.
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