Bangalore real estate promises lucrative returns in coming years
While the realty sector across the country is witnessing a tortoise pace, the Bangalore real estate market is soaring high, in regard to demand and supply. This is mainly because of the upward trend in the demand for professionals in the IT/ITes sector for the last few years.
The IT sector is one of the key drivers of the real estate market, of some of the prime cities like Bangalore, however, given the stumbling economy and hiring in the country hitting the skids, property investments are likely to prove to be a risky endeavor.
Why IT is the soul of Bangalore?
IT sector is considered the soul of Bangalore’s real estate, both in terms of commercial and residential. According to market reports, demand for professionals in the IT sector in the city have propelled up by 34% in comparison to July-Dec 2012.
The IT/ITes sector have contributed significantly, in the number of units given on lease in the city. Companies like Amazon, TP Vision, Synergy et al have absorbed huge space in the city. Statistics confirm that more than 8.5 lakh IT professionals are currently employed in the city. This gives rise to the demand for residential units and acts as a boon for the developers.
In addition to it, the city has a high absorption rate in regard to commercial space and has one of the highest per capita incomes. This, has opened door for a number of key realty developers to build housing units in the city and in suburbs.
Why invest in Bangalore?
Investment in cities backed by IT sector fetches lucrative returns, in comparison to non-IT cities. In the last few years, properties in the city have increased by 100-200% that promise of 20-25% return on investment in the next two years.
According to market experts, property investment near IT locations such as Electronic city, Whitefield and Hennur road are likely to yield fruitful returns. Properties close to IT corridors are expected to be in great demand and have appreciated by 500% in the last few years. However, the outskirts of Bangalore have not witnessed such appreciation.
With plans of expansion in store and rekindling of the hiring process, the realty sector is likely to get adequate boost and rise several notches up in the next few years. Increasing number of IT set-ups will trigger the demand for residential space in the city significantly and will give real estate an edge.
Though, it is a fact that IT drives the demand for housing units in Bangalore, many other factors play a crucial role in it. Insurance, service and automotive industry work side-by-side to maintain the status-quota for real estate demand in the city.
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