The Bangalore residential market is experiencing a change in dynamics and an overall slowdown in purchasing activity, says the latest report from real estate services firm Cushman & Wakefield.

High prices, steep home loan rates and anticipation of a price correction have resulted in a wait-and-watch attitude among end-users. There has been about 15-25 per cent drop in primary sales across micro markets over the past six months. Real estate brokers puts the dip in sales in the past few months almost close to 40 per cent.

The areas surrounding east/south-east corridor, a preferred location for IT/ITeS employees, have witnessed a relative increase in capital values due to the slow but steady secondary market. North Bangalore too has been able to maintain its price run-ups propelled by the end-users’ and investors’ sentiments over the last six months.

Many projects launched by developers in South-East Bangalore during 2004 and 2005 are ready for occupation; this means increased availability of mid-segment apartments (between 1,200 sq ft and 1,600 sq ft). The rental values of apartments in this region have therefore stabilised and would continue to remain the same. Going by the number of villas and plotted developments in North Bangalore, it appears that this suburb is being positioned differently when compared to the high-rises in eastern and south-eastern suburbs.

Projects offering villas are priced anywhere between Rs 1.2 crore for mid-level market and upwards of Rs 2.5 crore for high-end users. Developers are likely to boost the sales over the next 6-8 months with plotted developments, apartments with better amenities, premier positioning, innovative marketing and financing strategies.

With the new Comprehensive Development Plan finalised, developers are applying for fresh sanctioned plans to avail themselves of extra FSI and consequently the launch of projects may be deferred.


News Source: The Hindu
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