Bangalore: Property prices drop, buyers celebrate!
Bangalore real estate sector, which is tagged as one of the strongest seller’s market at present, is again in the spotlight on account of a sudden dip in property values over the last one year. As appealing as it sounds, the Bangalore property market has been showing signs of favor towards the buyers’ off late.
Bangalore’s realty market has witnessed a decline last year, a trend that is fast catching up in Tier-II cities such as Patna, Bhopal, Kochi and Bhubaneshwar. So, what are the contributing factors for this, let’s have a look.
Bangalore scenario overview
As per the market experts, this price drop can mainly be attributed to the huge gap between supply and demand. Average sale of properties has been scaled down to 10-40 per cent. Developers quote that home buyers have embraced the ‘wait and watch’ mode for a long time, on account of skyrocketing property rates coupled with high home loan interest rates. This, consequently, has toted up the number of unsold inventory in the Bangalore real estate market.
However, the recent drop in interest rates has roped in joy for the developers of the city, injecting significant boost to the buyers’ sentiment.
According to the proponents of the industry, property rates for residential units in South-East Bangalore (near Sarjapur Road) have scaled down in the last one year by 15-20 per cent. Except Koramangala, key locations of South Bangalore like JP Nagar and Jayanagar have registered a drop of about 9-16 per cent. East Bangalore, which has witnessed a price correction much before south, have registered a decline of 6-12 per cent in 2007.
In comparison to other cities
Given the National Housing Bank’s Residex (an index which keeps a track of the property rates in major Indian cities), the residential properties of Delhi, on an average are valued 1.5 per cent less than the last year. As per the index, 13 out of 26 major cities witnessed a fall in property values, out of which the TIER-II cities felt the heat badly.
Prices moved down for residential properties by 13.6 per cent in Meerut, the sharpest fall out of the 26 cities, followed by Vijaywada and Ludhiana at 10 per cent respectively. In comparison to Jan-Mar 2013, prices of properties in Indore, Coimbatore, Jaipur and Chandigarh were cheaper by 5 per cent in 2014. However, there was no slump registered in the rest of the country, hence, Surat, Chennai and Nagpur registered price hike of 10 per cent in just one year.
