Is Bangalore’s realty scene offering variety better options for when compared to other metros?
The slowdown in the growth of the Indian economy has become a major cause for concern for the core sectors. This is expected to impact several other sectors including real estate, feels Sanjay Raj, a keen market observer and CEO, Golden Gate Properties.
The realty scene in many of the brisk markets across India was reported to be gradually losing pace, although some key areas in most cities didn’t see any slowdown. “However, Bangalore has remained a rare exception,” says Sanjay “as the housing sector here is on the growth trajectory in line with the expectations, despite a minor dip in demand.”
Home sales are bullish in Bangalore when compared with other cities. Plenty of reasons can be attributed for this, he says. “Unlike other metros such as Mumbai and Delhi, Bangalore offers a variety of options, from affordable housing to smart homes.”
According to latest industry data, there was a significant drop in home sales in Mumbai and Delhi during the last quarter of 2011-12. While Mumbai witnessed a dip of 58 per cent, Delhi witnessed a decrease of 57 per cent when compared to the corresponding period the previous year. The drop in demand in Bangalore was 18 per cent.
Another positive indication is that Bangalore witnessed the highest home sales in the 2011 calendar year among metros. While 49 million sq. ft of residential property was absorbed in Bangalore, the National Capital Region (NCR) saw a development of 46.88 million sq. ft followed by Mumbai Metropolitan Region with 35 million sq. ft.
Multitude of factors
The growth in sale of apartments and villas is driven by many factors, the primary being that the residential projects are available at various price points. “A buyer in Bangalore has the option of selecting a house at any price between Rs. 20 lakh and Rs.1 crore or more,” says Sanjay. The rise in prices has not been steep as compared with other markets. “In the last two years, the increase in Bangalore averaged between 10 and 15 per cent per annum unlike Mumbai or NCR, where prices tend to shoot up abnormally. The speed of executing the projects is also much better in Bangalore,” he says.
The rental scene
According to real estate consultants Cushman & Wakefield, compared to Hyderabad and Chennai, Bangalore’s commercial office market has been witnessing steady growth in demand, supply as well as rentals. There may have been some fluctuations, but the overall trends over a period of time have been positive. Both demand and supply have seen increases resulting in vacancy rates coming down. The rentals have either increased slightly along the growth corridor or have remained stagnant in other micro markets across the city. The market is becoming tenant favourable not really in terms of the quoted rentals but factors like lower or deferred rent escalations and free car parking slots.