The demand for one bedroom, kitchen (BHK) has been on increase; the developers over the past few
months have launched or are launching several residential projects in the south
and north Bangalore Industrial areas. With the proper and reasonable pricing to the properties with 1BHK flats, the situation in the real estate market is
likely to improve in the coming months.
In view of the high costs
of projects, the affordability to buy 2 or 3 BHK flats in such projects has
gone down to some extent. This might have caused large number of already
developed flats in the past few years, lying vacant for a considerably long
time. During recession period, real estate market was badly affected and as
such there was a down trend in the sale of apartments. Added to this situation
of 'No mood to buy', inadequate infrastructure and poor connectivity also
affected the real estate market of Bangalore.
However, the situation
seems to have changed now in view of many infrastructure projects taken up by
the various local authorities of Bangalore.
Bangalore is changing
fast. Projects for widening of roads all around the metro, strengthening of
city transport by adding large number of buses, construction of under/over
bridges, construction of sub-ways are all in progress. The most eagerly awaited
ambitious project 'Metro Rail' is scheduled to commence its runs by 2011. The metro rail project will certainly improve the connectivity. Better connectivity
will also help the real estate market to improve. The much improved
connectivity and good infrastructure will be a boon to the real estate market.
With the reduction of the size of flats to one BHK, the prices of flats have come down. There seems to be
healthy improvement in the number of buyers of the reduced sizes of flats. The
demand for such single BHK flats being high, the developers may even think of
letting out the unsold flats on rental basis in case sufficient buyers are not
found. This will not only help the people desirous of occupying flats on rental
basis but also developers for getting some returns on unoccupied flats. The
demand for residential accommodation will, to some extent, be met.
The demand being more for
smaller units with one BHK, what will happen to the already developed
properties with more than 2 BHK flats? The developers are offering various incentives for their properties and expect that they will be able to dispose of a good number of such flats in the coming months.
However in the absence of
data about the vacant units of the developed properties, it may be difficult to
know about the actual number of unsold units.
All efforts will have to
be made by the developers to persuade the prospective buyers, for disposing of
their developed flats, instead of keeping them vacant by offering all possible
and practical concessions like deferred payments, affordable EMIs etc. in
prices instead of offering various luxurious benefits.
With the availability of
comparatively easy funds by way of loans at lower rates of interest, lowering
the sizes of apartments from 2 BHK 3 BHK to 1 BHK, lowering the property rates
by correcting the price structure, improvements in the job market, it looks like the real estate market may show some improvement in the coming months.
However one will have to wait and see what will happen in the coming months. We
may have to look for some concessions forthcoming for the badly hit economy ofthe real estate industry in the ensuing State/Central budget.
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