The two leading metros of the country Delhi NCR and Mumbai are under the immense thrust of unsold real estate inventory; interestingly Bangalore has surfaced as a clear winner in this grim situation as there is a perfect equilibrium between demands supplies in the coming quarters. Credit for this cheerful situation goes to well developed IT/ITES industry and consistently growing population of the city, the need for the real estate property in Bangalore is ever increasing. Another factor which played an effective catalyst role in the grim environment is the idea to promote more affordable apartments in Bangalore than luxury projects.
Let us examine the dynamics which have that have defined the Real estate in Bangalore–
- Cutting down of the built-up area– There have been progressive yet significant decrease in the average built up area that builders are offering. This has happened after the announcements which were made by the FAR. This has lead to a sharp decline in the prices of the residential and has been enticing many mid-income home buyers. Developers are also milking this opportunity to increase their profit margins while they are also catering the need of the most significant section of the society.
- Limited haggling- In cheap housing category, there is less scope of bargaining as compared to the high-end projects. Developers are not required to magnetize the home –buyers of the mid-income group with freebies or other styles of living items which eventually add up to the cost of the projects .This is one vital reason why the builder are still managing to extract profit out of constructed units.
- Emanations of the outskirts- The Silicon Valley of the India has expanded topographically in the suburban areas and outskirts are now the hot spot of the real estate industry. Adequate land availability at a much affordable property in Bangalore price than the core city has been a boosting factor. The infrastructure is also developing at a faster pace in these areas and connectivity is also getting better. This is stimulating the developers to launch residential in the affordable category.
There are several localities which are offering ready to move affordable localities in Bangalore and there are performing quite well on the investment side as an average properties in areas like Bannerghatta and Arekere are delivering ROI of 7-9 % consistently during the last two quarter.I t would be very intriguing to see how they perform in the coming quarters.