Boom in the Real Estate Market 2014

Prashanth G N says that sound growth in the IT sector has made certain the boom in the real estate market too. It is likely that many significant housing projects would come-up in Bangalore in 2014 that will give the buyers many choices to get spoiled.

The Bangalore real estate market is likely to remain steady in 2014 and 2015, when compared to Delhi, Mumbai, Ahmedabad, Chennai, and Hyderabad says real estate players, watchers, analysts, and developers. The sales in both housing sector and for office space were remarkably good in 2013, which has kept the developers tad bubbly. In 2014 many major projects are set for launch that would definitely excite the buyers. It is likely that the demand witnessed in the year 2013 will also continue this year.

Nagaraj Reddy-President of the Confederation of Real Estate Developers of India (CREDAI) in Karnataka said that due to boom in IT sector in 2013 about 9 million sq. ft. of office space was created that can accommodate around 9 lakh professionals. This increased the demand in housing sector, suppose if 10 per cent of the 9 lakh professionals go for new houses, then the market would have 90,000 readymade houses in two years, considering Bangalore’s capacity to generate 45,000 flats a year. He added that the creation of immense office space will increase the demand for residential space in addition.

Various choices for buyers to get spoiled
The new projects that are set to launch would see a mixed trend of conventional and luxury villas and apartments and are priced in the range of Rs.50 lakh to 1crore and a half. The High nets worth individuals (HNI) have actually showed their interest in all the three projects that are coming-up at Devanahalli, Electronic city and Whitefield. In the entire national market, Bangalore real estate market is fairly well, says Karun Varma a real estate Analyst. Considering the facts like the better rupee-dollar equation, US doing well, and exports doing alright, the housing demand is likely to continue steady. There are around 3-4 dynamic transactions that are expected to emerge as lucrative this year and buyers would left with more choices of residential space with the generation of office and commercial space.

The mid-end segment mainly driven by end-user buyers will lead the residential real estate market, says real estate analyst Naveen Nandwani. Considering the on-going commercial activities and other alternatives available in south-east, north, and east submarkets, it seems the demand is mainly focused for residential units in the range of Rs.6-10 million price brackets. Assuming the projected demand, the capital values in these locations are also likely to see an increasing trend. Taking the factors like the ongoing infrastructure projects like Hebbal-BIAL Expressway, Metro Rail, and Peripheral Ring Road locations like Kanakpura Road, Mysore Road, Thanisandara Road, Tumkur Road, and Hennur Road are likely to observe rising tug activities in the residential market.

The influence of IT sector
Suresh Hari of CREDAI Bangalore said that residential real estate market would likely to decline by 25-30 per cent considering the trend witnessed in the last two years and the approaching election this year. The price appreciation is anticipated to be in the range of 5-20 per cent and the supply in the residential market would be13 per cent or more. The commercial real estate market is likely increase by 5-10 per cent against the previous year, which is again based on the previous trend, office and retail space. Rental value increase by 5 to 20 per cent on an average and the supply front would increase by 5 to 10 per cent against previous year.

Bangalore is not influenced much by the slowdown in the sector, says Brotin Banerjee, MD & CEO of Tata Housing and the city has outdone most of the other top metro cities in the country. Bangalore is hyped as the 10th most favored destination for property investment in Asia-Pacific. Bangalore has been the best performing locations, due to the development in infrastructure and connectivity to Bangalore International Airport Limited in North Bangalore and in the future quarters, Banashankri and Devanahalli localities would outdo due to the advantages in their location.

Developers expect for some relief in the approval system and in floor space index (FSI). It is also anticipated that if government sanctions vertical development beyond 3.5 FSI, then it would be an extra advantage for the real estate groups, as they can build more units if the demand continues to be stable. It is likely that whatever is built in 2014 would sell except if any huge cancellation of office space creation happens.