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Unit launches maintained at quarterly average; prominent developers gain market shareBengaluru recorded launch of around 7,700 residential units during the first quarter of the year, a 16% decline over previous quarter. However, this supply during Q1 2023 is comparable to the quarterly average unit launches of ~8,200 unit during the year 2022. The eastern quadrant (Whitefield, KR Puram, Budigere Cross), a prime IT hub, was the major contributor to Q1 launches with a 43% share. This micro-market received a boost with the KR Puram to Whitefield Metro route starting operation in March. The other IT corridor of the city on the South-east (Bellandur & Sarjapur Road) together with eastern quadrant accounted for 52% share in Q1 launches. Ready-to-move-in projects continue to attract buyers, although low availability as well as steady decline of unsold inventory is expected to keep demand high across projects and the launch momentum is likely to continue.

Developers such as Prestige Group, Godrej Properties, Brigade Group, Casagrand Builders and Sattva Group accounted for over 35% of Q1 launches, suggesting a growing share of prime developers. Prominent local players accounted for another 30-31% share during the quarter

Mid-segment dominate launches; large-sized apartments gaining traction
Mid-segment projects led quarterly launches with ~54% share backed by good demand. High-end and luxury projects accounted for 14-15% share in new launches in a market that is increasingly favouring this segment. Driven by sustained demand for houses with ticket price of INR 1.3 crores and above, we anticipate sustained unit launches in this category in coming quarters. Affordable segment had an increased share of 32% in Q1 launches, and most of these projects are in peripheral locations like Jigani, Chandapura, Hoskote and Mysore Road.

Preference of end-users for larger apartments is rising, and developers are focusing on such configurations in their newly launched projects. The 3 & 4 BHK apartments accounted for a dominant ~54% share in quarterly launches. Within the mid-segment category (~4195 units), the 3 & 4 BHK apartments accounted for ~68% share.

Rising RTO % pushes rents and capital values upwards
With rising number of employees returning to office (RTO), city-wide rentals saw a q-o-q growth of 8-10%, while on a y-o-y basis the growth is in the range of 25-30%. Limited availability of rental options, particularly in the established IT corridors has led to a slightly higher rental growth (10-12%) at select locations. Rentals in Whitefield, the IT hub of the city which now has a metro connectivity, is likely to record further growth in the coming quarters backed by strong demand from IT professionals getting back to their workplaces. Healthy sales momentum observed since last 2-3 quarters resulted in average q-o-q growth (4-5%) of property prices in mid-segment projects across the city. Eastern micro-market with locations in and around Whitefield witnessed 8-9% growth in capital values this quarter.

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