When the whole of Indian real estate sector is in a lull, Bengaluru has some promises. Read to find out.
Bengaluru:
The situation of real estate in the whole country as witnessed in 2014 was bleak. In cities like Pune, Gurgaon and Noida the unsold stock increased with the buyer’s sentiment remaining at low levels. In cities like Hyderabad the realtor took to lowering the prices of their constructed projects for higher segment by tailor making the projects a bit and lowering the cost and tried to sell it to middle segment. The prices in other cities remained the same but were pretty high and the bank interest remaining high the buyers were in a dilemma whether to invest or not. The market watchers opined that the buyers are probably interested as the enquiries poured in large numbers, in the regions like NCR, Delhi and other places. This made them feel that a trigger is probably required for the market to respond and to convert the enquiries to sale. The RBI’s stand of slashing rates were expected by the real estate sector but probably due to keeping the inflation rate under control it was put to abeyance. Although from the communications of RBI it seems that there can be a slash in the rates in the first half of the next year. In this disorganized situation the real estate sector of India is gasping for liquidity to flow in and the buyers are expecting more stability in the market situations.
What is the situation in Bengaluru?
Bangalore is an end user driven market with 80 % of the investors being end users. The employment generation ability of the city is one of the highest in the country. There are many plans of the government and construction is already on for many IT parks in places like Doddaballapur and Devenahalli. New infrastructure is added every time there is a necessity and that makes the market of Bengaluru one of the most lucrative markets in India. In one of the surveys conducted by an exhibition company in Dubai and UAE, it was noted that the out of the top 25 destinations invested by the NRIs of Dubai and the UAE Mumbai stands at 20th and Bengaluru stands at 23rd position. Not only the NRIs from UAE, but most NRIs from all over the globe and also foreign nationals are increasingly choosing Bengaluru as their favorite destination in India when it comes to real estate investment.
What is the impact?
The impact of such sentiments of the buyers is highly positive for Bengaluru. Buyer’s Sentiment indexes predict that Bengaluru will be the only city to witness a growth in the new residential sector in the year 2014. The forecast for other five metro cities are expected to see a decline with Mumbai and NCR being the most hit which was evident from the poor sentiments of the buyers.
Data indicates that the six metros namely Delhi and NCR, Mumbai, Chennai, Pune, Hyderabad and Bengaluru accounts for 70 percent of residential segment sale in India. In this forecast it was predicted that all the six metros will register a 10 percent decline in the sales over last year’s figures.
Analyzing the data by an international real estate consultancy company it was predicted in June this year that a 4 % decline of sales will happen in these markets with a figure of 2.75 lakh units across these markets. But in reality a sharper than these figures were noted which disrupted the calculations.
The firm notes that there is a ray of hope in one of the cities of India and its Bengaluru which is the only city to end this year with a growth of sale by 3 to 5 percent. It is expected that 60,000 residential units will be sold as against the figure of 57, 000 units last year.
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