BANGALORE: While home builders and buyers in Mumbai and NCR were a worried lot, folks in Bangalore had cause to cheer. Bangalore’s property market bucked the trend in other metros with many new launches, good demand and resilient prices.
Sector experts predict that residential property the city will remain a good bet for 2014, too.
Still-affordable prices compared to other cities, strong IT sector performance which should keep demand going, and interest from expats on a weak rupee, are seen as boosters to this market.
The city’s office space sales could be the highest in the country too, thanks to expansion plans of IT-ITeS firms and MNCs.
Bangalore will be second only to Tokyo in the Asia-Pacific region in demand for offices, estimates property consultant Cushman & Wakefield. This will help drive home demand, too. Every 100-200 sq ft office space addition means one employee added to the workforce.
Active home market
In 2013, Bangalore accounted for a third of all new property launches in the country, according to data from Cushman & Wakefield.
New units launched trebled to 40,000 units till September 2013. Most residential launches were in the price range of Rs 25 lakh to Rs 1 crore, according to Vestian, a real estate advisory firm.
Compared to the growing numbers of flats remaining unsold in markets such as Mumbai, Bangalore even saw a shortage of homes with a Rs 50 lakh to Rs 1 crore price tag.
The commercial segment, which was in the doldrums elsewhere in the country, was also resilient in Bangalore. Global majors such as LinkedIn started operations in the city, and local companies sought office space to expand. The city is home to around 2,800 IT/ITes firms and accounts for about 60 per cent of all biotech companies in India.
Unlike other regions, there was good momentum in infrastructure projects with the peripheral ring road, airport expansion and Bellary elevated expressway taking off, aiding home prices.
Development initiatives such as the Devanahalli Business Park, Hardware and IT Park in Bagalur and IT Investment Region near Chikkaballapur are expected to help demand in nearby areas.
Still, not all localities in the tech city may have a smooth ride. While north Bangalore outshone most other areas last year, the focus is now shifting back to the central business district and the outer ring road, observes CommonFloor, a real estate portal.
Prices have run up in the locality and may likely remain subdued this year.
With a high net-worth individuals population of about 10,000 — the third highest in the country after Delhi and Mumbai — Bangalore’s super-luxury segment is also worth watching.
While the supply has picked up, a lacklustre private equity, venture capital and M&A market, may act as a drag on demand, notes Vishnu Shankar of Crorepati Homes.