It’s certainly going to be an uncertain year for the real estate sector in 2019, as stated in the Emerging Trends Report compiled by the Urban Land Institute. Unlike the previous years, the real estate trends this year are going to be multi-layered and full of surprises. But even with the overlapping trends, Bangalore seems to be “the city” to invest in this year. Let us delve deeper into what to expect in 2019 –
Emergence of the Young Buyer
Young buyers between the age of 25-35 were the biggest drivers of the property boom in Bangalore between 2002 to 2008. Over the last decade though, the number had gone down. But with amazing prospects in the IT industry, easily accessible loans, and tax concessions for first-time buyers, the young brigade is expected to make a comeback and invest in properties in Bangalore especially in popular residential markets like Bellandur, Yelahanka, and KR Puram. The steady price appreciation, upcoming real estate projects, and close proximity to numerous business districts in these areas had attracted a lot of young buyers last year and will continue to do so in 2019 as well.
Inventory Troubles to Ease
Throughout the country, project delays have plagued the real estate market. But Bangalore has had the lowest unsold inventory among all the major cities in India. Things are looking even better for Bangalore in 2019 as the inventory troubles will decrease at a rapid rate due to easily accessible home loans and higher buying power granted due to better job prospects.
One of the major trends in 2018 that had a huge impact on reviving the residential real estate market was affordable housing. The sales had been driven up considerably in the affordable housing market. 2019 is predicted to showcase the same trend with the added advantage of the smooth implementation of RERA and lesser confusions over the implementation of GST. With the implementation of GST, the taxation on properties has become much simpler. All the previously applied taxes like VAT and Service tax, etc have been summed up into one. Properties are currently taxed at 12% on the base cost but according to the reports, this number is anticipated to be reduced to 8% or 5% but we’ll have to wait a little bit more since in the GST meeting it was deferred to the Group of Ministers (GoM).
Although the RERA act seems like a long shot now with its ground deployment being an almost failure but the government is anticipated to make a comeback with building enough affordable housing and backing it up with better rental housing.
Suburbs to become Key Markets
With most of the residential areas of the main city already past its breaking point, people have started to move and reside in the outer parts of the city. The government has also put in a lot of time and effort in sprucing up infrastructure in these areas. Realizing this paradigm shift, the real estate developers have started investing in the suburban areas of KR Puram and Bhattarahalli.
The New Workplace
With more flexibility in the working environment brought about by the adoption of concepts like co-working, work from home and other flexible working options, people are open to buying cheaper homes further from the business districts. While infrastructure in such localities might not be much, it still bodes to be a great investment.
Luxury Housing vs Affordable Housing
Luxury housing, although having a very niche market with only having a particular class of clientele, is of immense importance in the real estate market. Affordable housing, on the other hand, has been the flavour of the season from the last 2-3 years. Due to the Government’s efforts to promote and cater to affordable housing policies and acts, the demand for luxury housing has been degrading, but it’s not going to die either. The huge number of startups and the strong Indian economy has given rise to a new class of buyers who have not acquired the wealth from the ancestors but earned it. So they want to live accordingly without any compromises. So due to this class of new buyers, the luxury housing remains alive despite the government’s efforts to cater to affordable housing.
The upcoming general elections in March will have have a great impact on the real estate markets, not just in Bangalore but throughout India. Even so, in 2019 the Bangalore real estate market is predicted to remain stable and offer great investment opportunities for all.