Bangalore Realty Market Prone to Price Drops

November 27, 2006	(Be the first to rate this story!)  Loading ...
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The ongoing realty boom in Bangalore seems finally to have ended now. The growth in prices in the commercial property market, which has experienced boom since between 2003 and 2006, has dropped precipitously. Data showcased by various property surveys show that the average price rise in the apartment costs is no more than 5% to 10% whereas it was 40% to 50% before. Bangalore had faced short-term drop that were followed by quick recoveries but not an across-the-board drop.

As for downturns, the most dramatic slide occurred in some known locations like Whitefield that had experienced fair hike in prices of the commercial property whereas those in other locations are climbing at a constant clip. However, the North Bangalore is able to maintain its price run ups that are believed to be propelled by the end users buying and investors’ sentiments.

Far more common is a decline in the South Bangalore’s property prices where buyers’ response is now less than enthusiastic and the plunge is crystal clear by low absorption and flattening growth rate of capital values, says Manish Grover, national director in property consultancy Jones Lang LaSalle India. The growth in average capital values has abridged to about 5% during the current year.

People are more interested in buying the property with the intention to sell it within a few months to make good profits. This is what causing the phenomenon of speculative buying to loose its impetus, with investors supposing Bangalore market going high. Earlier, such speculative buying was able to drive the gains when prices were peaking at over Rs 50/sq ft a month. But, the procedure is loosing its pace now.

Commercial sector of Bangalore, which once was the hottest selling projects, has its own inconsistencies. Here, demand continues to be good, supply has kept moderate pace, and in some locations has surpassed demand. However, industry experts predict Bangalore area commercial property prices will soften but not sink.

News Published Under:   Real Estate India, Bangalore |

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