Bangalore Real Estate Round Up 2014

Bangalore city is known for its charming residential localities and a cosmopolitan crowd. The city has everything an ideal city needs to have and as a result many others from across India and the world choose Bangalore as an ideal city to live in. The city also has the best infrastructure and standard of living among the three top South Indian cities. When it comes to the real estate industry, the city has high quality living spaces for a reasonable cost. However with the increasing demand, price of real estate in the city has been growing with a steady pace. There has been a 13% capital appreciation annually for housing units like apartments in Bangalore. With an amazing climate all throughout the year, Bangalore has been one of the top preferred city among all the other south Indian cities in India.

Bangalore market boasts of steady growth in sales, keeping the market on its toes. Builders have explored the market in depth and they are on the look for new and developing markets in Bangalore to invest in. This is addressed the steady demand the end users generate in the realty sector in Bangalore. Bangalore not only attracts residents from India to invest in but, there a huge number of NRI investors in Bangalore, mostly looking to invest in a second home in India, and to reap good benefits from the steady rental market here. Apartments and villas in Bangalore have been a popular choice of investment for the NRI population.

The recent real estate symposium organized by SIRES (South India’s Real Estate Symposium) organized in Bangalore revealed a lot of important aspects about the realty sector here. A real estate market survey organized by LJ Hooker revealed a few important numbers and figures. The survey suggested that Bangalore actually has over 76,000 units oversupply of housing units of about 10,000 units. Apartments in Bangalore are the most over supplied housing unit. One the other hand villas in Bangalore faced a slight undersupply of about 4 percent in the market.As of today the financial burden on builders with an oversupply situation is about INR 1000 crore in the city. This survey definitely opened our eyes on what exactly the market needs at this point.

Alexander Moore, CEO, Jones Lang LaSalle said to The Hindu that, "Prices have risen by nearly 7 per cent in the past 18 months but sales velocity has halved in the last 12 months. Budget homes sector has performed best in the last six months with supply at +8 per cent, value homes were at +24 per cent and mid-range at +41 per cent. The survey assesses the prices of the average apartment at Rs. 79 lakh, which is 58-75 per cent higher than the affordability of the average buyer. As for the choice of locations, the survey points out that South-East Bangalore continues to be the prime region with 48 per cent of the stock and +23 per cent supply. The North-Eastern parts of the city lag behind with unrealized demand at +32 per cent. The North-West is statistically small but undersupplied."

Ranjitha is a freelance writer and blogger, following the Houses for sale in Bangalore and real estate sector closely for many years.