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?
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  • Bangalore all set to overtake London

    Well! Bangalore real estate sector may be in its consolidation phase but I think that the city will again show signs of flourishing market.

    According to the property surveys, Bangalore is believed to have left London behind in the demand for commercial space and gains the position after Tokyo with demand for commercial property fledging up to 10 million sq ft a day.

    As far as the demand for residential space is concerned, Bangalore is leading rest of the country with the total annual demand being 35 million sq ft. The city has construction work of 140,000 apartments in its early phases of development that is likely to complete over the next two years with the annual offtake being around 30,000 units.

    The demand for residential units has been boosted by growing activities in the IT sector. Earlier, a majority of Bangalorites including middle and high middle class used to regard Rs. 15 Lakh as affordable money to get an apartment. Fast developing economy of the garden city has altered this figure to Rs. 25 lakh today which clearly underlines mark improvement in the financial status of different income groups.

    Like its sister cities, Bangalore realty sector has hoard of rogue builders and fly-by-night operators who focus on employing sharp practices to avail the benefits out of this burgeoning demand for residential and commercial spaces. Out of 400 builders, only 100 of them would be there who are governed by its ethics and code of conduct.

    Still, the real estate boom in Bangalore has grabbed the attention of not just big Indian players, but also overseas realtors. So, the boom is likely to continue.
  • Bang the Target - Bangalore

    Hello Everyone,

    Have spent little time in Bangalore, I still feel so attached to this city that I cant afford to miss a single opportunity to add to its growth profile. And I always find this online forum a nice source to carry out such tasks. :)

    So, here is something regarding its bright future prospects in realty sector.....

    The city of Bangalore has always been known to attract the attention of potential investors who keep on jostling hard to grab the piece of fast flourishing real estate here.

    Nowadays, why most people want to purchase the property is just to dig out monetary gains in return. For that reason, they either let out their premises or lease it. Often touted as “Garden City of India”, Bangalore’s fascinating blossoms and luxuriant greenery has now been taken over by mushrooming software industry and shopping malls.

    Bangalore may be losing out to Pune if International studies and reports on Real Estate and Property are to be taken into serious consideration. But, the city is still a hunting ground for the prospective property developers, with ever growing demand for commercial as well as residential properties surging to record high.

    Most realty biggies have already expanded their business horizons to Bangalore and include the Brigade Group with projects in Whitefield, Malleswaram-Rajajinagar, and Old Madras Road. Likewise, HM group is ready to establish a substantial presence with a luxurious residential complex coming up 1.8 kms from SarjapuraRd and near Hosur Rd.

    The property boom in Bangalore is further fuelled by the emergence of this city as IT hub and a retail destination in recent years. Several companies enjoying substantial presence in the business market are planning to spread their wings to Bangalore. The list includes global players like Toyota, Volvo, Accenture, Royal Dutch Shell, Spirit Aero Siemens and WindRiver Systems.

    Prices may not rise at a rapid pace because the geographical demand and supply are not being matched as they should be. Bangalore is not the only place facing such a situation. However, the town planning and development authorities are to blame for this that lack to come up with long term strategies for growth of the cities that contain tremendous potential. With the proper initiation of the government, the city can have an improved scenario.

    So, what destiny has in store for this vibrant city?
  • Just want to continue this thread..

    Where is the real estate sector going now....

    I see a lot of interested buyers, but are they really buying???
    or just the brokers are pooling the properties and waiting for price hike..

    I had seen many brokers blocking apartments in lots and selling them for profit ( mainly in sobha, Mantri and others)
  • Bangalore has plenty of supply. You do not buy there for an investment. Buy if you plan to stay there..
    I saw your earlier post on 2 BHK for 60 Lakhs.. Problem is the same property on rent will be not more than 15K.. reason being.. Bangalore has a young IT crowd and rentals they cannot afford beyond 10 to 15K.. People with higher salaries will go for a 3 BHK at 22- 25K..
    It is a beautiful city, but there are huge infrastructure issues.. 5 years of Dewa Gowda set it back considerably.. City has potential.. so wait and see for quality of life to improve.. but still no VFM as an investment..

    Originally Posted by sniper2k7
    Just want to continue this thread..

    Where is the real estate sector going now....

    I see a lot of interested buyers, but are they really buying???
    or just the brokers are pooling the properties and waiting for price hike..

    I had seen many brokers blocking apartments in lots and selling them for profit ( mainly in sobha, Mantri and others)