The residential market in Bangalore is expected to witness a price rise of up to 15 per cent over the next 6-8 months. This move by developers to increase the prices rides on the positive run, which they have witnessed during 2011.
According to a research by Nirmal Bang, a brokerage and analyst firm, the first two months of 2012 witnessed the launch of several projects by reputed developers and the momentum is expected to continue in the coming months, thanks to the demand from the IT/ITeS sector and better affordability compared to other cities in India.
“Bangalore has seen absorption of 49 mn sft of residential property in 2011, more than in any other Indian city (4 per cent and 40 per cent higher than NCR and Mumbai respectively). Further, it reported a 15 per cent y-o-y increase in absorption in calendar year (CY) 2011 in commercial space compared with 8 per cent increase and 9 per cent decline in absorption in NCR and Mumbai, respectively,” Param Desai, an analyst with Nirmal Bang wrote.
According to Desai, the residential capital values in Bangalore are not above their 2008 peak, unlike NCR and Mumbai markets, thereby providing high affordability quotient. While Prestige Estates has hiked prices in the range of 11-14 per cent over the past two months for its projects, Sobha Developers has said its overall price realisation has improved 27 per cent during the past fiscal.
According to per real estate consultancy firm Knight Frank, Bangalore residential market saw the launch of around 90 projects in nine months to FY12, translating to an incremental supply of over 30,000 units.
