Ups and Downs in Bangalore Realty Sector - Is the end near?
The long feared realty bust seems to knock at the door of Bangalore first. The growth in prices in the property market, which has experienced boom since between 2003 and 2006, has dropped precipitously. The average price rise in the apartment costs is no more than 5% to 10% whereas it was 40% to 50% before.
Locations like Whitefield have seen the most dramatic slide in the property prices whereas those in other locations are climbing at a steady clip. However, the North Bangalore, being the exception is able to maintain its price run ups as for now. Indeed, its pace is believed to be propelled by the end users buying and investors’ sentiments.
The most unexpected fall is observed in the South Bangalore’s property prices where buyers’ response is now less than enthusiastic which is clearly reflected by low absorption and flattening growth rate of capital values. The growth in average capital values has reduced to about 5% during the current year.
People are more interested in buying the property with the intention to sell it within a few months to make good profits. This is what causing the phenomenon of speculative buying to loose its impetus, with investors supposing Bangalore market peaking.
This change has taken place not in the arena of residential property but also involved even the commercial sector of Bangalore. It is also going through a phase of consolidation. Here, demand continues to be good, supply has kept moderate pace, and in some locations has surpassed demand.
Industry experts forecast that Bangalore area commercial property prices will soften but not sink. Can their predictions be believed?
