Bangalore’s residential property market is bouncing back with a spurt in the level of enquiries for all categories of units. Unlike earlier, enquiries ranging from budget apartments to high end homes are up with the result property developers are regaining confidence to launch new projects.
As the city’s residential property market is predominantly dependent on the IT/ITES sector and with the resumption of hiring and hike in salary by 6-7 per cent, there is a renewal of interest among techies in buying second or even third homes, feels Hemang Rawal, Managing Director, Samruddhi group. With the gradual improvement in the liquidity level, the buying pattern too has also changed, feel industry sources.
According to realtors, if the residential units are in city areas or even closer to city areas, there is less resistance in paying the premium. As far as the mid-segment is concerned for units in the price range of Rs 45 lakh – Rs 60 lakh, there has been a turnaround in demand pattern in that the number of enquiries has gone up in the last 4-5 months, according to developers. It is likely to continue for another three months.
Interestingly for high end homes there is renewed interest across all micro markets for units in the price range of Rs 1.25 crore –Rs 1.5 crore. Till October last year, villas in a similar price range were not evincing interest among homebuyers. Thereafter enquiry levels have started picking up with the result prices are up by 10-15 per cent across all micro markets in a span of one year. “The only price range for which there continues to be resistance to sales even today is the residential units in Rs 60 lakh – Rs 80 lakh category due to current supply level exceeding demand “, feels N S Srinivasa Reddy, Manager- Research & REIS, Jones Lang LaSalle Property Consultants Pvt Ltd.
The recent property shows in the city has also revealed the level of demand pattern prevalent among the homebuyers. A leading housing finance company has issued spot approval of home loans worth Rs 260 crore during the show days. The average loan size was ranging between Rs 30 lakh and Rs 40 lakh and the volume of business generated was over Rs 200 crore. Similarly a leading nationalised bank has reported encouraging response to the show held in its premises and the average home loan size was said to be ranging between Rs 50 lakh and Rs 60 lakh.
The recent hike in home loan lending rates has not had much impact at all as a few banks and housing finance companies have offered special rates till the end of the financial year to woo the home loan borrowers. There is another reason for the sudden surge in demand as the cost of construction has gone up by 12-15 per cent in the last six months. “Every project commenced a year ago has to witness input cost hike by 10 per cent and the contractors are now insisting on including escalation clause apart from agreeing for a base price”, said a leading developer.
A significant development is the changing perception of the market in the residential segment. “Unlike earlier, the trend is more towards investing in 3 BHK units especially with the price rise happening for 2 BHK units”, says L S Vaidyanathan, Executive Director, Operations, Nitesh Estates.
As regards demand pattern, property consultants feel that the high level of demand in and around CBD areas continues to remain uninterrupted but the predominant demand is felt in the vicinity of IT/ITES companies with the improvement in connectivity levels.
The demand is said to be high for built units if the number of enquiries received by various developers during the recent property shows is any indication. Basically demand hinges on two main factors in today’s context. It is at a certain price level and specifically location driven and if it matches, then sales is not a constraint at all, according to property consultants.
Source: ET Realty