Bangalore realty seeing fewer buyers

Bangalore realty is experiencing a change in market dynamics, witnessing an overall slow-down in purchasing activity. Residential real estate is witnessing 15 to 25 per cent drop in sales in the last two quarters.

This slow off-take has resulted in price correction to the tune of 20 per cent to 30 per cent in suburban areas and peripherals locations, but in the central business districts (CBD) and off-CBD, the price is stabilising.

According to people associated with realty trade, this is due to steep housing loan rates, strict lending norms, tight pricing by developers and buyers anticipating more price correction.

The developers, to minimise their damage and to push sales, have resorted to dishing out freebees, no pre-EMI fees, and few add-ons. They are also offering furnished kitchen or free home furniture.

Property prices on Hosur, Bannerghatta and Kanakapura roads have witnessed a good amount of correction, whereas Whitefield, which saw a correction early this year, is now seeing price stability.

While north Bangalore was fairly unaffected, except for the Bellary road locations, Tumkur road did not see any price drop. The demand continues to be steady in both locations. This is due to the good infrastructure, and a few companies relocating to the north and international airport getting ready.

According to international property consultants and Cushman Wakefield's study, the areas surrounding east/south east corridor, continue to be preferred by the IT/ITeS employees and have witnessed a relative rise in the capital values due to the slowdown, but a steady secondary market.

North Bangalore too has been able to maintain its price run ups propelled by end-users and investor sentiments over the last six months.

Areas in CBD like M G Road, Brunton Road, Lavelle Road and Cunningham Road continue to cater to niche yet steady demand for premium developments.

Embassy and Skyline developers have added to the list of exclusive complexes offering high-end specification and amenities, similar to construction in this segment by Sobha, Prestige, Purvankara and Nitesh. There is no significant increase in prices in CBD and off-CBD locations since last six months.

In its property outlook, Cushman Wakefield says, "An additional supply and market sentiment fuelled by interest rate hikes is likely to keep market conditions sluggish in short run and medium run. Majority of micro markets are likely to remain stable in short run, leaving a few locations like Sarjapur, Outer Ring Road and Hosur Road layouts where there would be a marginal increase in rentals."