Bangalore Residential Market on Map


>> The unsold inventory stands at 76,058 units, with a value of INR 65,411 Crore. This is an 18% increase in the past 6 months and a 30% rise in the last 12 months.

>> The value of the unsold inventory being carried by builders is an additional INR 10,037 Crore (representing aprox 150 - 200 Crore per month in added holding costs)

>> During the last 6 months there was a net addition of 41,324 units to the inventory, and the incremental sales were 30,598 units, giving an oversupply of 35%

>> Sales Velocity stands at 2.1% which is on par with the last period but a 50% fall on the same period last year

>> There is 15 months of inventory in the market which is similar to 6 months ago but double what it was at the same period in 2013.

>> The average price of residential developments grew by only 1.2% for the period to INR 5,030/ - from INR 4,936/ -

>> The apartment segment had an increase in average price of 2.7% during the first half of 2014 with 3.2% in the previous period giving a year on year increase of 6% (14% less than the current inflation rate of 7.02%)

>> During the last 6 months the maximum stock additions took place in the Budget Homes category with 15,341 units followed by Mid-Range category with 11,337 units.

>> The highest unsold inventory lies in Premium segment (1-3Cr) with 34% of the total inventory unsold and an oversupply for the period of 218%.

>> Premium category homes shares the highest value of unsold Inventory in the market with INR 24,052 Crore which is 38% of the total value of unsold.

>> Budget Homes and Mid-Range homes had the strongest average Sales Velocity and lowest Months Inventory proving the markets sensitivity to ticket price.

>> Apartment stock made up 77% of the value of unsold inventory and 19% was from the Villa & Row house segment.

>> The Row house segment while small (less than 1% of the overall market) saw the highest increase in Sales Velocity with a rise of 23% (to 3%) and only 9.4 Month of Inventory. This would suggest there is some additional demand for this style of property.

>> The Eastern quadrants contributed the highest supply and unsold inventory. The South East contributed 102.7 Mn. Sft. Of supply and 35 Mn. Sft. of Unsold inventory.

>> The Central region observed the highest Sales Velocity of 4.1% (double the average) this reflects the buyers desire for known safe locations when the market softens.

>> The size of the averag e apartment has continued to fall now being 1,636 sft, a drop of almost 7% in the last 18 months. Reducing size is really the only way left for builders to reduce ticket size whilst trying to maintain their margin.

>> The Sales Velocity for Villa/Row developments has dropped all the regions except the North West.

>> The Residential Market has witnessed 24,305 units in new launches over the last 6 months. This contributed 40.2 Mn Sft. of built area. 80% was apartments, and 12% are plotted developments.

>> The value of the Unsold Inventory in the newly launched projects is INR 12,868 Crore and 86% of this is made up of apartments.



In the year of 2013 we noted a slowing of sales and a build in inventory (+12% by value). In the first half of 2014 we have seen the situation deteriorate with a further rise of 18% in inventory value, so a cumulative 30% rise over 12 months with an additional 15,850 Crore in inventory now being held by builders.

As a consequence prices have remained flat with the average price for the key apartment category showing a rise of only 2.7 % in the last half giving an annual rate of 5.9%. Villa prices fell by 2.6% in the half.

Sales Velocity has remained as it was 6 months ago at a soft 2.3%, with 15 months of unsold inventory in the market. The total residential stock being developed represents 4 years inventory at current absorption rates.

Key Indicators

The below table shows the flow of the Inventory during the first half of 2014. There is a net addition of 41,324 units while the incremental sales were only 30, 598 units, giving an increase of 16% in the inventory being held.

Inventory Movement

The market has an unsold inventory of 76,058 units, out of this 84% is from the dominant apartment segment.

Sales Velocity

The below charts shows the trends for Sales Velocity by property type, all numbers are low with only the statistically small row house segment showing an upswing to 3%. Plotted developments Sales velocity has drastically come down from 5.7% to 1.7% as compared to the Dec-2012 figure, the reason of this plunge could be the increase in the price, it is been noted that the average price of a plotted development increased by 30% from its June-2013 price

Months Inventory

The below chart illustrates the months required to sell the current unsold inventory. Villa developments have the highest months of inventory rising to 22.5 months, double where it stood 18 months ago. The apartment and plotted markets have remained relatively stable since the last report but are still historically high. Plotted development inventory has remained stable due to less stock coming into the market, as the absorption has been extremely weak.

The following chart shows the price movement of each product in detail.

Price Movement

Apartment developments had an increase in average price of 2.7% during the first half of 2014 while it was 3.2% in the previous period giving an annual 6% increase.

The highest increase observed was in plotted developments with an increase of just under 30% in the last 12 months. Villa square foot rates have fallen by 2.6% from the previous period.

Trend in the Average size

Apartment sizes fell slightly again and are now 7% smaller than 18 months ago. The average size of an apartment for Bangalore city stands at 1,636 Sft. while the Villa average is 3,453 Sft.

Region Wise Inventory Movement

The above table shows the inventory movement of the 5 regions of Bangalore. As in previous reports the maximum new stock has come into the market in the established eastern regions, with the South East remaining the area having the maximum new supply (37% of the total).

Absorption is also the highest in the South East being 41% of the market total for the period.

The largest mismatch of supply v demand is in the South West where supply was 105% greater than demand.

Price Category Wise Inventory Movement

Maximum inventory has been delivered in the Budget Homes category with 15,341 units released, followed by the Mid - Range category at 11,337 units.

The highest number of sales was also witnessed in the budget homes segment with 14,137 units. The lower 2 segments (Value & Budget) saw supply and demand in a reasonable match with only a slight over supply.

The big oversupply has been seen in the Premium segment (1- 3 CR) where supply was 218% of the current demand. This has meant a buildup in unsold inventory in the segment of 57%. There will be major pressure on builders to shift this stock in the coming period.



The above table explains the supply distribution of the various residential development types in detail. As we see Apartments contribute 69% of the total supply and 75% of the current unsold inventory (77% by value).

The value of unsold inventory has reached INR 65,411 Crore, being an 18% increase in the last 6 months. This means builders are now carrying an additional burden of INR 10,037 Crore on their balance sheets.

Trends in the Demand Indicators

You can see that the Sales velocity indicator (which measures demand) is relatively flat at a historically low rate of 2.1%. In particular the demand for villa’s continues to collapse with a 17% fall on the back of the earlier 45% fall. The Row house segment showed the only significant increase in the Sales Velocity but it is a very small section of the market. Apartment demand showed an increase but it should be noted that this came off the back of a large decrease, and the 12 month number is still a slowdown of over 40%. Monthly Inventory remain stable at 15 months.

Region Wise Market Dynamics - Residential Apartments

The chart for a partment supply mirrors the general market with the Eastern sectors having the majority of the supply (72%).

The interesting point to note is that the apartment sector holds INR 8,782 Cr (88%) of the increase in unsold inventory.

Trends in the Demand Indicators

The central region observed the highest Sales Velocity of 4.1% coming off the back of 2 low half year results of sub 2%. The North East region has shown an 11% increase from the Jan - 14 Sales velocity moving from 2.1% to 2.4%.

The lowest Sales Velocity and the highest month’s inventory was seen in North West with 1.6% and 20.6 months respectively.

Price Trend (Plots are not taken into consideration)

The North West region witnessed the highest increase of 13% in its average pricing with the average price reaching INR 5,202/- psf. The Central area saw a large decline of almost 22% but this could possibly be attributed to the low volumes recorded in the area and the statistical anomalies this gives.


Villa /Row House - Supply Dynamics

The highest number of Villa/Row House developments is occurring in the South East with 27.6 Mn Sft. followed by North East with 16.7 Mn Sft, with 60% of the unsold supply being from the South East region.

The unsold inventory is 35% of the total stock. The western area is the worst performing with over 40% of the inventory unsold.

Trend in the Demand

Sales Velocity for the Villa/Row developments has collapsed in all the regions except the North West. The North West Region has increased by 42% from the Jan - 14 figure, but this seems primarily due to the low initial base and it still stands at only 2.4%. Inventory was generally steady at around 17 months but the North East region reached the highest level at 31.7 months which is 91% of the increase from Jan -14.

Plotted Developments - Supply Dynamics

Most of the plotted developments are within the South East region, which contributed 54% of the total Supply and the unsold inventory.

The value of the Unsold Inventory for the plotted Developments in the market is INR 2,850 Crore.

Unsold inventory for plotted developments is relatively low at only 20% of total stock.

Trend in the Demand

Plotted developments have seen the highest increase in price but this appears to have negatively affected the sales velocity. As mentioned earlier we have seen a 30% price increase for plotted developments during the last 1 year but the only sales velocity over 2% if the North East sector, so sales seem to have slowed dramatically as a result of the price increases.

Price Category Market Dynamics - Supply Dynamics

Budget home contributed the largest share of supply with 32% followed by Premium and Mid - Range with 29% and 26% respectively. But the highest unsold lies in Premium segment with 34% of the total unsold stock.

Premium category homes have the highest value of unsold inventory in the market with INR 24,052 Crore which is 38% of the total value of unsold and over 40% of the total inventory in the segment.

Trends in the Demand

The market is showing that it remains price (ticket) sensitive and the Budget Homes and Mid - Range homes retained a better average Sales Velocity and Months Inventory as compared to the other categories.

New Launches over the Last 6 Months

This portion will detail the market for new launches and it includes all projects which are either in the prelaunch stage or in the launch stage, we have considered all the projects which opened for bookings by the public.

The Residential Market has witnessed 24,305 units of newly launched stock over the last 6 months. This contributed 40.2 Mn Sft. of which 80% is apartment stock and 12% is plotted development.

The unsold inventory for the newly launched a partments are 14,116 units (68% of total stock) while for Villas/Row houses it is 652 units (62%).

The value of the unsold inventory in the newly launched projects is INR 12,868 Crore and 86% of this is in the apartment segment.

Comparison of Newly Launched Vs Ongoing Projects

The below table shows newly launched projects have a higher Sales Velocity than the general market. Most of the buyer activity has taken place on the pre - launch or in the launch stage due to more attractive pricing.

Newly Launched

To better understand the current market dynamics we have given both the new launch and ongoing projects demand indicators. As shown the Sales Velocity’s of new launches is some 400% better than ongoing projects.

Ongoing Projects

The average prices of ongoing projects are 4% higher than newly launched projects. Once again a clear indicator of the markets sensitivity to price.

Price Trend in the Ongoing Projects

Key Residential Locations - Apartment Developments
Bangalore – Central

Bangalore – North East

Bangalore – North West

Bangalore – South East

Bangalore – South West

Key Residential Location - Villa & Row Houses

Delhi - National Capital Region(NCR)