Bangalore; stage for progressively growing residential real estate

First quarter of the fiscal 2013 has been generous for the residential sprawl in Bangalore. Unlike other metro cities in India, Bangalore witnessed the growth of this sector to an enormous level of 100% new residential units launched in January-March, 2013. Whereas Delhi, Mumbai and Kolkata faced a cumulative decrease to 2% during the same period.

 Hyderabad and Ahmedabad felt the grudge of steepest decline in number of new residential units launched in last quarter. Delhi and Mumbai were victims of the similar slump owing to lack of funding and ever escalating cost of raw materials. It is intriguing, how Bangalore as well as Pune, maintained the growth graph amidst this measured and sluggish economic environment. Cushman & Wakefield (C&W), the global realty consultants have reported; 5700 unit launches for mid-end segment of the value chain. The probe for reason behind this niche growth leads to the mid-end segment units being one of the triggers. All the metros have encountered rising demand of affordable housing in the last few years. This demand has been complemented by rising income levels but confronted with high inflation rates in the Indian economy. However, developers have gaged the demand and to up-keep the flow of investments, they are relying on catering more affordable options to earning class. The sale figures of mid-end housing have subjugated the rising cost of construction and properties as the number of buyers have increased at a parallel pace.

Northern Bangalore has been the host of maximum launches owing to its proximity to commercial hubs and investment corridors leading to IT and ITeS services in this region. The number of launches in the first quarter of this year has literally been double of figures for same quarter in FY 2012. It’s not just the lower prices offered by the builders but the specifications of units have also been smaller. At the same time, northern Bangalore has also flourished in terms of values for high-end luxury residences whereas north-western part has seen growth in both, high-end and mid-end value houses. North-western side of Bangalore has seen speculative investments due to continuing infrastructural projects along the metro link.

Most strikingly, Eastern Bangalore has a massive demand for mid and low-end housing in the current quarter. This has been the outcome of rising investments in IT sector and the consequential employment generation. The migrating population from Karnataka’s outskirts and adjoining states has further added to the growing demand of houses here.  Though not many major cuts have happened in the pricing slabs of the current projects, buyers have been lured with schemes from banks and stable interest rates in the recent past.

Around 30 to 33 percent of residential projects launched in top eight cities in India were accounted in Bangalore. Magnitudes of FDI and increasing joint ventures supported by financing at lower interest rates have played a major role in the realty sector’s sturdy health in Bangalore. The city termed as the technology capital of nation, Bangalore looks promising for working people from all rungs of affordability.  

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