Bangalore: If you are planning to buy a house, perhaps now is the time to do so. After three years of unprecedented growth between 2003 and 2006, property prices across much of Bangalore are now falling. And falling sharply in many areas.

A survey by real estate consultancy Asipac finds that residential prices in south east Bangalore (around Sarjapur Road) have dropped 10-20% in the past one year — with prices now in the range of Rs 3,600-4,600 per sqft against Rs 4,000-5,300 a year ago.

South Bangalore including Jayanagar and J P Nagar (except Koramangala) prices are seen to have dropped 8-15%.

East Bangalore, which was the first to see corrections, as TOI reported earlier, is estimated by Asipac to have witnessed a further price drop of 6-12% in 2007.

The city centre and parts of North Bangalore (especially between Hebbal and Yelahanka) are the only areas seen to be still holding up, the former because of lack of fresh supply of property, and the latter because of the proximity to the upcoming airport.

“In many cases, the quoted prices may be higher, but developers are throwing in a lot of freebies that effectively bring the price down,” says Asipac chairman Amit Bagaria.

The price drop is the result of the enormous gap between demand and supply. Average sale volumes are seen to be down 10-40%.

“Developers who were selling 60 flats in a quarter a year ago are today selling barely 6,” says Mayank Saksena, VP in property consultancy Jones Lang LaSalle Meghraj.

Asipac estimates that against a total sale of about 33,500 homes by the entire organized sector in 2006, this year will end with a sale of no more than 26,000 homes. At the same time, the number of properties under construction has increased manifold.

Irfan Razack, CMD of the Prestige Group, admits property prices in the city’s peripheral areas are at an “all-time unrealistic high”.

Geetha Naresh, a property consultant, says investors who had blocked their money on prime properties in Whitefield and Marathahalli two years ago paying between Rs 1,600 and Rs 2,000 per sqft are today willing to sell at the same price.

“There are instances where investors are even willing to sell below their purchase price, at rates like Rs 1,500 per sqft,” she says.

Many speculators and investors had entered the market in 2005 and 2006, booking multiple flats, thinking they would be able to dispose them of once prices reached a certain higher level. “They only paid the initial amounts and they did not have the capacity to pay the full amount. But now they are all stuck. Neither can they pay the instalments nor can they sell the flat because of poor demand. And since they have to pay off bank loans, there is large-scale distress sales happening,” says an analyst.
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  • Rentals too are down in the city

    Now atleast for some time we can Enjoy the Sweet Home. :)

    Bangalore: It’s not only apartment prices in Bangalore that are falling. Land prices and rentals too are.
    Mayank Saksena, VP in Jones Lang LaSalle Meghraj, says land prices in Whitefield have dropped 25-30% in the past six months alone, and about 10% in other parts. “Developers are not keen on picking up land since they think prices will fall,” he says.
    One industry observer notes that the two Reliance groups (Mukesh and Anil Ambani) and HDFC together had picked up nearly 100 acres near the Devanahalli airport in January this year at Rs 2.25 crore an acre. “They thought it would hit Rs 3 crore by December. But I know a neighbouring plot that’s today going for Rs 2 crore an acre,” he says.
    Mukesh Pradhan, who picked up a second flat (a premium three-bedroom place) on the outer ring road, was hopeful of getting a monthly rental of at least Rs 25,000. But even after months, he has been unsuccessful in finding a tenant to pay that figure.
    Hardly surprising, considering there are hundreds of flats lying vacant in what is described by some as “ghost complexes”.
    Property consultant Geetha Naresh says a three bedroom villa at a prime residential property that went for Rs 1,30,000 a month last year today fetches just Rs 75,000.
    So is it a good time to buy property? Most analysts advise some more waiting. Real estate analyst Ankur Srivastava says some time in 2008 may be a good time to buy. So does Saksena: “It will take 6 months to 1 year for the excess supply to get absorbed.”

    Source : TOI
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  • Good Information is being shared here by Arin. I too have similar views on both the posts by him on Bangalore property market. To provide a bit of introduciton about myself, I am a software engineer workign for a MNC in Bangalore.

    I can currently afford(obviously on Housing loan) to buy the falt but wont really look at buying currently as I feel that there is still a time for Bangalore real estate to touch the bottom price. I see a lot of appartments comming up/buit in south bangalore (BTM, N.S.Palya, Bannerghatta road/Jaynagar/JPNagar). The one which are already ready to occupy and completed have put up huge advertisements/hoarding for the sale, from a long time but not really getting sold, which is a clear indicative of the Bangalore real estate market cooling off !!

    I see the same advertisement/horading from past 1 yr or so for many appartments. Many of the upcomming appartments have stopped/slowed down their construction because of the scracity of the buyers. Those category of ppl/investors really denied a right of 'A house for everyone' in India by creating an artifical boom.

    Looking at these situatiuon, I really feel good that the greedy investors / NRIs who has lot of money in $$$s artifically created a big real estate boom in Bangalore as well in other cities, are being punished now by the people to whom they had denied their right. And so many of them are really forced to sell at the price that they have bought or even below, as they can not at all afford to hold those extra property that they had blocked to make a huge money out of real estate boom.

    My advice to poeple like me, who really need an own house to live a decent life, and do not want to deny right of a good living to others, Wait and watch for atleast 8-12 months further to see a price fall.
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  • Still Many to come down

    You may find Good amount of fall. I am also a IT Eng. Becos of our poor Tax valuation we tend to go for a house. So that we can save some tax. The amount that is again enjoyed by big Politicain/Developer etc. This time I think there is a talk going on to increase the Tax bracket, below 500000 Lks it is 20% only. If this implemented then a good amount of Home Loan taker will again reduce. So now its the time for the FAKE booming of the real estate in India to come down.
    As you know US/UK housing also coming Down, So India is no far. If US get Cold India will Sneez.
    No more Good days for DLF/Purva/Mantri... They have looted Common peolple anough.
    :p
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  • Good for you guys in B'Lore ... Hope this has a domino effect in Mumbai and other parts of India as well. In Mumbai, if one is in the vicinity of newly constructed buildings at around 8.30 - 9 pm (by which time most ppl are usually home), you will observe no lights in atleast 60-70% of the flats.

    If your circumstances allow you to .. please hold off your purchases .. even if you can afford these prices, pls do not put your family to risk by buying at a price which will entail a major part of your salary going towards an EMI -- think about how the loan will be serviced when these high paying jobs vanish .. remember 2001- 2002.

    Basic economics of demand and supply will take care that prices gone down to those 3 years back. I have seen the same happen in the US ... it will happen here too.

    Greedy investors and builders have just made life misarable for everyone wanting a roof over their heads. Economically, nothing dramatic has happened in the past 3 years for prices to go up three times, our incomes have not gone up 3 times nor has the population gone up 3 times nor is there a sudden influx of crorepatis into our cities. Only the rich are making more money, feeding politicians and builders.

    Builders are also desperately trying to create a hype by splashing news paper ads, doctored articles, organizing mega events etc .. While they seem to have borrowerd a lot of this from classic Marketing books .. they seem to forget that marketing mix comprises of Price as well not just Promotion.
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  • See market coorection soon !!!

    See how the US market is falling down. And I people have seen the Sharp fall in Stock Market also. These Builder and the Developer earns in 100-500%, Drives a Benz/BMW. And this stupid Media is the biggest culprit for this hype. One day they say it is falling, in another 10days they are screeming that the price is increasing. They have really some deal with the Developer.
    A major percentage of hike in this is because of the IT indus. And see if your Job is going tomor u will be under soup. I think every one now knows about the US recession.
    And if you are so fond of buyng Burgain to the extreme. Dont just give your money simply to this people putting your familiy into trouble.
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  • DLF Bangalore Projects

    Hi,

    May anyone advise me on the exact locations of DLF projects in Bangalore? I am from Gurgaon and exploring options to invest in DLF projects in Bangalore. Also, is anyone aware of the prices of DLF projects as well as their competitors?

    Many thanks!

    Cheers.
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  • white field
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  • Dlf Share 800

    VALUE FALL 30-40%.
    BIDADI - 30 KM AWAY. DONT THINK OF INVESTMENT. IT WILL TAKE 2/3 HRS TO TRAVEL TO OFF. AND 4-5 HRS TO iNT aIR pORT
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  • the right time here yet? - help pls

    just been looking at properties on ..........com and the rates in whitefield seem to be in the 1.9-2K mark. is it a good time to invest in bangalore now? what would be good suburbs to invest in? ive heard about whitefield, kormangla and bannerghata road...
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  • Its Wait and Watched Mode !!!

    Don't invest in Bangalore in Property Now. It has already gone high. You may not be able to a good return at all. You may get Better return in FD/PPF. And if you are planning to buy property for immediate occupation then wait for another 3 months.
    You can see many FLATs are lying empty in many places. And even these places dont have any facility like Phone/Drainage/Cable though they are almost the City Limit.
    Many places the rates are still 1500-2000 Rs but still for another 3-4 yrs you cant think of staying or building house !!!

    Thanks
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  • Read this article !!!

    Cars and kitchens tempt Indian housebuyers

    Free cars and mortgage-free living are being dangled in front of house-hunters in Bangalore as developers battle to halt a property slump in India's Silicon Valley.

    House prices have fallen by as much as 20 per cent this year in the sub-continent's IT capital on the back of a building boom and fears that the US sub-prime crisis will stall the huge recruitment plans of the city's flagship outsourcing companies.

    After the meltdown on Wall Street, the Indian software industry's most important client, similar declines are being reported in technology hubs across the country. Vincent Lottefier, head of the Indian operations of Jones Lang LaSalle, the property consultant, said: “We are definitely seeing pricing pressures and corrections in areas where outsourcers are putting on the brakes.”

    Freebies commonly thrown in by increasingly desperate developers include complimentary fitted kitchens, extra parking spaces and relief from stamp duty. Some, however, have been more generous. Orange Properties, a Bangalore company, has promised a free Maruti SX4, a four-door family car, with every 1,500 sq ft flat. The saloon costs up to 800,000 rupees (£10,120), representing a discount of 20 per cent on the 4 million rupee apartment.
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    Similarly munificent sweeteners are being offered elsewhere. Unitech, another developer, will scrap monthly repayments for three years on properties in Noida, an IT hub close to Delhi.

    Buyers appear unmoved amid suggestions that a new generation of young property purchasers is becoming savvier. Sudhakar Mallya, of Bangalore, who expects prices to fall at least another 10 per cent, said: “I have seen a lot of empty apartments. There is lots of supply and prices are still sliding. I will wait”

    Signs suggest that the demand for residential property is still fading in the IT hotspots. Rents in some areas of Bangalore fell by nearly 10 per cent last year after builders provided a glut of supply in anticipation of a fresh influx of technology workers from across India, according to Cushman & Wakefield, the property consultant.

    Jones Lang LaSalle estimates that apartment prices have fallen by 15 per cent this year in Gurgaon, a leading outsourcing centre, and in Chandigarh, an emerging IT hub, prices have slumped by 25 per cent.

    The commercial property market has recorded a similar trend. In Whitefield, a Bangalore suburb once regarded as a prime location for IT firms, there was an estimated 1 million sq ft of spare office space in the first three months of this year. Last month an auction of several plots of prime property in the Bandra-Kurla complex in Bombay, a development being touted as the Indian Canary Wharf, failed to find any buyers.

    The malaise follows a property boom in which average house prices rose by as much as 50 per cent last year and the sector attracted an estimated $5 billion (£2.5 billion) in foreign direct investment. In contrast to the market frenzy last year, the incentives for buyers to hold tight increased this month after lacklustre financial figures from the four largest Indian IT companies - Tata Consultancy Services, Infosys, Wipro and Satyam - stoked concerns over the health of the sector.

    TeamLease Services, India's largest recruitment firm, said that it had experienced a large fall in hiring intentions. Sampath Shetty, a vice-president, said: “Dollar depreciation, the sub-prime fiasco, the US recession and recent falls on the Indian stock exchanges have definitely had an impact on employment growth in the past few months. The IT sector is the worst hit. There is a wait-and-watch approach in India.”

    - TimesOnline
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  • Small update !!!

    Pujit Aggarwal, MD, Orbit Corporation, said demand has been poor for the last 3-4 months in Mumbai’s premium and CBD segment. “If this demand continues to be poor, prices may correct to some extent because everybody needs money or cash flows to pump into projects. So, developers may look at reducing prices.” He expects further correction of about 10-15%.

    Gulam Zia, Head of Advisory Services, Knight Frank, said the Mumbai market doesn’t have much to add to supplies, a very little supply is coming in. He feels prices in Mumbai are not really follow suit with the rest of India.

    According to Zia, metro markets have already seen a correction or downward trend between ranges of 10-15%. “In Tier-II markets, it’s just about touching 10%.”

    Zia too expects a further 5-10% correction in suburban areas of Mumbai like Andheri, Bandra, Borivali, Ghatkopar, Kurla, Mulund, Thane, and New Bombay.

    Excerpts from CNBC-TV18's exclusive interview with Pujit Aggarwal & Gulam Zia:

    Q: How does the realty market look to you from the manner in which experts are speaking about the market, it looks like two distinct markets, Mumbai and the rest of India?

    Zia: The point that you have raised is absolutely valid. Mumbai has its own way of reacting to market realities. On the Pan India scenario, the markets are looking pretty vulnerable to melting down or prices coming down. But this is not really an indication of alarm bells ringing because the fundamentals are still strong. You have people keen to buy, have that demand-supply gap existing, and have the buyers out there. It is only a question of going back to the right prices, which we are waiting for. The Mumbai market is acting very strange. The Mumbai market doesn’t have much to add to supplies, a very little supply is coming in. Hence, prices are not really follow suit with the rest of Indian market.

    Q: How much have prices slid in the various other markets like Delhi, Chennai, Hyderabad, or Bangalore? What is the percentage decline, where do you see the bottom emerging, and how much more can they fall?

    Zia: Let us categorize them into two segments for the ease of communication. One are the metro markets that’s NCR, OMR and so on, and the other are the Tier-II cities like Pune, Hyderabad, and so on. The fall has been higher in the metro markets. In NCR or OMR, we have already seen a correction or downward trend between ranges of 10-15%. In Tier-II markets, it’s just about touching 10%. That’s roughly the correction that we are seeing in the market.

    Q: What is your sense on the demand-supply situation currently, have rental prices cooled off a little bit in the commercial space?

    Agarwal: There is segmentation taking place in the Mumbai market. You have segments that are within the city which is around Rs 10,000 per sq ft. Then, you have other areas which is the premium segment. You also have other belts where you have the concentration of CBDs, or Central Business Districts.

    Areas with rentals in the range of Rs 10,000 per sq ft are within the city. There is good supply and reasonably good off tick. But in other segments, which are the premium and CBD segment, demand has been very poor for the last 3-4 months. If this demand continues to be poor, prices may correct to some extent because everybody needs money or cash flows to pump into projects. So, developers may look at reducing prices.

    Q: What are the CBD districts? Would you mean the suburban areas?

    Agarwal: When we talk about the CBD districts, it is the Bandra-Kurla complex belt. We are talking of the belt which is mushrooming around there. So, that is one area. The other is Central Mumbai, which is mill land. The third CBD is New Bombay and Andheri. So, there is supply coming in over there and because the supply is coming in, corporates have shied away. A case in point is typically the BKC sell which took place where you had people queuing up to buy land in BKC. You have found that there were properties in BKC that are prime properties and there were takers for those properties.

    Q: How much have prices fallen in the pockets mentioned?

    Agarwal: There have been selective deals where we have seen prices falling by about 10% and not more than that. One should observe the stock exchange performing the way it has. The stock exchange has been a single significant factor in the fact that prices have been either stable or have somewhat corrected. If we see this stock exchange moving the way it is moving right now, in a rangebound situation, we may see further correction of maybe about 10-15% more.

    Q: Even the Mumbai market is facing price pressures?

    Zia: That’s right. However, Agarwal is referring more to office properties than commercial properties. The areas of CBD etc that he is referring to are all office properties. The South Bombay housing stock is very vulnerable as hardly anything is coming up. There is no new supply coming in areas like Cuff Parade, Napean Sea Road, or even Central Bombay and that is why property prices are still holding strong.

    But in suburban areas like Andheri, Bandra, Borivali, Ghatkopar, Kurla, Mulund, Thane, and New Bombay where housing supplies are coming into the market, we are seeing these price corrections coming in. Those price corrections are to the tune of 10% or thereabouts right now, which is expected to grow because supplies are coming in. It is expected to keep flowing in the next couple of quarters and hence there will be a direct pressure on price points.

    Q: So another 10% is not ruled out?


    Zia: I would say further 5-10% is expected. So, a correction of 20% would not be too speculative.

    - MoneyControl
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  • I see the price falling , I have been noticing the pricess of appt. in different real esate web site since last 8 months and drawn a graph - i can see it falling. I can also see some older adverts with igh rateas are not quoting less - and I think I will buy in the end of Q1 09. If the situation changes in US a bit and IT industry starts earning money the chances are that the Blore property is going to go up again. But I think a time in Q1 - Q2 09 would be a good time to buy. 1100 + car park will be available within 30laks (including registration + deposits etc).
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  • I think the prices will fall with very slow pace for next at least 2 years before they get stable and more over there are no projections for any big developments for infra by govt or big project by private sect. which makes the market very dull

    and now a days all the big builders are having huge cash flow problems and are looking for alternative investments for the money they have earned in previous years...
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