Did you know that Karnataka had the lowest delay in handing over the apartments and homes to buyers which stands at an average of 31 months? The industrial body ASSOCHAM published a report regarding the real estate sector that revealed that as many as 826 projects across the country have been delayed in delivery for more than four years. It also tracked the number of unsold units in the cities across India and Bangalore is at the bottom with the least number of unsold units than many.
The scenario in Bangalore real estate market is entirely different even with the struggle of the realty sector with the country being plagued with the economic upheavals and legislative reformations. The demand for real estate, homes, villas and apartments in Bangalore is pretty high due to the influx of migrants from other parts of the country. The industrial growth in the city is pretty fair with the absorption of office space than no other city in India which signifies there is a constant demand for housing in the metropolis. The property prices also remain fairly stable with a year-on-year hike of the prices of properties with the fact that the market is primarily driven by the end-users and not the investors. Although Bangalore, unlike cities like Delhi, Mumbai, and Kolkata is fairly new as far as the demand for housing and rapid industrialization is concerned, there are few characteristics that are a part of Bangalore too. The analysts feel they are as follows.
End-User Driven Market
Owing to the high influx of migrants into the city and the industrial spurt, the realty market of Bangalore is largely end-user driven. This is one of the reasons as the market has to tune according to the purchasing power of the buyers who are mostly end-users engaged in the IT and other industries, the prices of real estate in the city has always been stable opines the experts and analysts. As it is not so much investor driven, speculative pricing has not so much affected the Bangalore realty market. It has always been the case that due to speculative pricing the prices of few areas in different metros rises up due to the announcement of infrastructure development like airport which does not hold good in case of Bangalore. This is one of the reasons why the purchasers’ sentiments have always been high in Bangalore as there are no major fluctuations noticed in the Bangalore realty market.
Ethical Market Conditions
Even before the enactment of RERA, the condition of the realty market in Bangalore had been fairly ethical with lesser number of scams and fraudulent activities. While there were few fraudulent cases in cities like Delhi-NCR and Chennai where many of the realty giants were taken behind bars, the Bangalore market remained fairly ethical with the lowest delay in delivering the projects. The quality of construction too here is fairly well compared to other metros and cities of India. After the enforcement of RERA, the end users and the buyers became more secured and assured which even boosted the sentiments of the buyers.
Another important aspect of the buyers of the Bangalore real estate is that it mainly depends on credit and the purchasers buy properties on home loans. As the investors are low in number, most of the buyers buy homes or properties on bank loans and the notion that approval from any of the nationalized banks denotes that the property’s due diligence is done and is taken by the buyers as litigation free. As the Bangalore realty market runs mainly on the credit finance from financial institutions the cash crunch due to the demonetization did not affect the Bangalore realty market to the extent it did the investor-driven markets.
Projects Developed under Joint development
The real estate development of Bangalore is highly dependent on joint development with the agreement between the developer and the landowner to share the proceeds. In contrast to this scenario, the developers of other cities mostly buy lands on which they develop the buildings which become more expensive which are actually loaded in the prices of the apartments and homes.
IT and the ITeS sector are two of the sectors which constitute the major consumers of homes in Bangalore. The growth of IT and the ITeS sector in the city has been phenomenal along with the influx of the global IT giants who have migrated to the city. The employees of these industries are the takers of the mid-segment homes in the city. Not just the sale of homes and apartments but the rental market and the space for co-working and co-living segment is also boosted in the city due to the workforce from mainly these two sectors. The growth of industries in the city along with start-ups is also burgeoning along with the influx of industries in the metropolis. With all of these, the city provides a good infrastructure for the startups and a climate for the growth of industries which attracts the other migrants from other parts of the nation.
Undoubtedly, with all these plus points that the realty sector of Bangalore has, there is a bleak side as well and Bangalore also has its own share of concerns and problems. Be it water scarcity, demolition by BBMP or even the diminishing number of lakes and water bodies, the concerns that the city has is also unique. With all its pros and cons, Bangalore is a great investment pasture for the middle class and the investors too as there are all sections of flats, apartments, homes, villas, row houses and other housing options available at almost all the corners of the city whose prices escalate year-on-year steadily promising an assured return on investment.