Bengaluru Real Estate Market Forecast 2021
The outbreak of the pandemic had a huge impact on the commercial and residential setup. The lockdown imposed to curb Covid-19 brought in several limitations such as uncertainty in the job, delay in delivery of property by builders also. The new trend of ‘work from home’ also affected the demand for office spaces in Bengaluru.
Several initiatives have been taken by the state government to curb the issue. Several state governments announced stamp duty reductions while RBI keeps its repo rate at 4%. This has enabled the homebuyers to avail of home loans at an annual interest rate of 6.65%. All these are expected to bring in a change in Bengaluru’s realty market as well. The builders of Bengaluru are looking forward to capitalizing on the existing demand for affordable and mid-income housing units in 2021. According to the reports, the Bengaluru realty market is slowly getting back to normal and is expected to recover faster than any other market. This article will discuss the impact of the pandemic, the recovery procedure, and some new trends.
Impact of a pandemic on Bengaluru realty market
The pandemic has caused a halt in business activities in the year 2020 in the entire world. Bengaluru was no exception. Bengaluru realty market also suffered as a result of this. Offices were closed down due to the lockdown which was induced by the pandemic. The demand for traditional office spaces declined largely as people started to work from home.
The pandemic also impacted the residential property sector as the projects under construction were put on hold due to laborers migrating back to their hometowns. The pandemic also caused job insecurities which made homebuyers a little reluctant to invest.
Thus the pandemic has led to the decline of the realty market in the year 2020. This has encouraged the government to take further initiatives to revive the market conditions to the pre-Covid era.
However, by the end of 2020, the situation of the realty market slowly started recovering as the sales in Q4 stood at a rate 1.5 times higher than the Q3.
Bengaluru Realty Market- recovery measures
A survey conducted by some leading real estate portals showed that the Bengaluru realty market is all set for recovery and that it will recover back to normal before other markets. Several homebuyers believe it to be the best time to invest in real estate as now they are in a better position to negotiate the price of the property and acquire home loans at a much lower rate. Some of the investors are also looking forward to diversifying their portfolio by investing in real estate due to the uncertainty caused by the pandemic on other securities.
Some of the measures taken to revive the Bengaluru realty market includes:
Reduction of stamp duty
The Karnataka government has taken initiative by reducing the stamp duty. The stamp duty for properties costing up to Rs. 20 Lakhs, the stamp duty has been reduced to 2% and in case of properties until Rs. 35 Lakhs have also been reduced to 3%. In early 2021, the stamp duty was further reduced for affordable housing units as the stamp duty was reduced from 5% to 3%. The reduction granted on the stamp duty is expected to boost the sales and registration of real estate property by invoking the sentiments of the consumers. This was able to bring in a positive change in case of properties having stagnant prices and unsold inventories.
Facilitating digital home buying
Even though the pandemic has imposed restrictions on on-site visits, the real estate agents and builders have come up with an innovative way to review the property using the digital platform. The developers have provided the homebuyers with the opportunity to have a virtual visit of the property they choose to buy, by sitting in the comforts of their homes with families.
The market leaders have also taken initiatives to enable a digital sale by enabling facilities such as virtual tours, online payments, digital signature, and online documentation. The pandemic also attracted several NRIs investments in Bengaluru.
Robust connectivity and infrastructure
The government has also taken initiatives by improving the infrastructure and connectivity in Bengaluru. The proposed Outer Ring Road is an example of the initiative taken by the government as it aims to connect all the major highways around the city. Another example may be the upcoming metro lines which aim to reduce the traffic issues in Bengaluru. All these changes brought in by the government are expected to recover the realty market in the year 2021.
Undoubtedly the pandemic has a huge impact on the realty market in Bengaluru. The sales declined as the pandemic caused uncertainties and delays. However several initiates have been taken by the government and developers to revive the market conditions. As the lockdown restrictions have been reduced, some of the companies and colleges have restarted their functioning. This is expected to boost the demand for residential properties such as co-living spaces.
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Frequently Asked Questions on Bengaluru Real Estate Market Forecast 2021:
The real estate market in 2021 is expected to return to the pre-Covid era even if the transition is gradual. The government and builders are taking active roles to ensure more sales for the real estate investments by reducing stamp duty taxes and also providing online methods for property registration and sales.
The price of the property in Bengaluru has reduced by 2% in the last year due to the pandemic. The price of the properties has been reduced to ensure that the properties are made more affordable to the buyers. However, it is expected to rise in the future once the pandemic is settled and everything is back to normal.
The trends followed by the Bengaluru realty market include various reformations taken by the government, the affordable housing segments, co-living, and senior living spaces, etc. Various changes have been brought in the landscapes of Bengaluru to make it an ideal location for real estate investment.