Supply + Absorption in Bangalore Residential Market

Residential Realty Supply in Bangalore
As of March 2012, nearly 119000 residential units are under various stages of construction in the Bangalore market. About 35% of the upcoming supply in Bangalore is expected to be ready for possession by end of CY 2012.

The micro-market of Sarjapur Road shall contribute 31% to the total upcoming supply in the southern region, while another emerging micro-market Kanakapura Road shall be responsible for around 16%. [Both do not have Water Supply and are dependent on tankers] North Bangalore, meanwhile, will contribute 21% to the total upcoming residential supply in Bangalore, followed by the eastern region with 15% and West
Bangalore with 10%.

Central Bangalore understandably has presence only in the higher end of the ticket size split, mainly in the INR 40-80 million ticket size due to the dearth of developable space in the region.

Overall Bangalore residential market has been relatively resilient and has a somewhat healthy sales level.

Absorption
60% of their units under development have been sold. The sharpest decline in absorption level was witnessed by the southern and northern micro-market of the city. Central Bangalore was not impacted by any external factor and witnessed steady growth in absorption.

It has been observed that nearly 34% of the absorption in FY 2012 has been in the ticket size range of INR 2.5-5 million, followed by the ticket size of INR 5-7.5 million at 31%. Only 5% of the absorption has taken place in the INR 20-40 million ticket size.