BANGALORE: For the real estate sector across India, year 2013 did not bring much activity and the same was for Bangalore too. However, the Bangalore real estate market showcased a stable picture, in terms of pricing and actual transactions. The developers have now pinned their hopes to 2014 and expect that with the country-wide realty sector set to gain momentum after general elections, Bangalore will be benefitted as well. The city is driven by the information technology sector and with major IT companies planning expansion in the coming months the real estate market expects growth.
The current trend in Bangalore is stable with low growth. Year 2013 has been flat but in the next few months the trend is expected to improve significantly. The off-take will be higher in the IT sector, due to the falling rupee value we expect IT majors to add more staff. The sentiment is also expected to show significant improvements after elections.
The retail segment will show great improvement as a result of the recent Foreign Direct Investment (FDI) policy change, which allows overseas retailers to have a stake in brownfield projects. It will ease financial issues of retail segment which have been hard-hit in recent months. The policy change will see high growth in retail malls, ie both stand alone as well as malls forming a part of integrated townships, as opposed to high street retail shops.
Residential segment in Bangalore and Chennai
Year 2013 has shown a steady growth in both cities in the budget segment of Rs 50 lakh to Rs 1 crore, which is expected to continue in 2014. With numerous projects on the anvil there will be a high supply in the housing sector. This will stabilise the pricing in the real estate sector. It is expected that RBI will ease interest rate of residential loans, fostering a better demand. In the luxury and uber luxury segment, the demand is expected to be stable in 2014. Hence, developers will be able to maintain price and sale velocity.
In 2013, a fairly robust demand was witnessed in the Rs 50 lakh to Rs 1 crore bracket. In the ticket sizes above Rs 1 crore the demand has been affected. However, more than expected NRI sales in this segment had stabilised the demand. We see this trend improving significantly in the residential segment across all ticket sizes in 2014.