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Bangalore A Haven for Real Estate Investment
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The real estate industry in India is undergoing a phase of transition. The year 2013 saw a steady market for real estate in major Indian cities. In Bangalore, the residential market has been pretty stable as compared to its neighboring cities. It is expected that in 2014 the real estate market will gain momentum and get back on track. However, the development of the industry is largely dependent on the macroeconomic condition of the country.
A Silver Lining :
In-spite of the sluggish economy, there is rising economic prosperity among the masses which has increased the available purchasing power. Mid-range residential properties have been a popular property choice among people. Bangalore's real estate market caters to large consumers who are local buyers, working professionals who have migrated from other cities and also NRI clients. Bangalore in particular, has a large clientele from across the globe which is the reason why real estate market is still flourishing. Contemporary consumers have provided the opportunity to realty developers and builders to expand their product base. As a result, various new projects are being launched ranging from mid-range apartments to high-end luxury villas and integrated townships.
Sliding Rupee Value: A Boon in Disguise :
Like several other industries, the real estate industry has been affected by global slowdown and sliding rupee value. Inspite of the challenging economic condition, the real estate sector in India has performed comparatively well. While, there was a slowdown in demand for properties by local buyers, superior dollar value has encouraged NRI clients to buy properties in India. Bangalore being one of the most favored destinations among Indians living abroad, the sluggish rupee value has in turn attracted NRI clients to invest in Bangalore, thereby, salvaging Bangalore's real estate market to a great extent.
However, the recent announcement by Reserve Bank of India to hike repo rates by 25 bps (basis points) has been a constant debate. It is anticipated that such a move will push banks to increase the loan rates, which in turn will have a visible impact on home buyers.
Growth of Bangalore as a Real Estate Market :
Bangalore is a haven for real estate market. Over the years, real estate industry in Bangalore has witnessed massive growth due to improved infrastructure, better civic facilities, better road developments and better rail networks among others. Due to better connectivity and infrastructure, realty development is able to expand its borders to areas out of city limits which have great potential of becoming future hot spots. The improving socio-economic condition has encouraged the populous mid-income earning families to invest on real estate sectors. As a result of FDI will see many international players entering the Indian real estate market and a surplus demand is anticipated in commercial and retail segments.
Regions in Bangalore foreseeing Growth :
The city is seeing rapid developmental activities in all the four directions. East Bangalore is becoming fairly popular among realty developers and potential home buyers due to better road connectivity which has as come a result of ORR linking to major IT corridors and other places of interests. Areas such as Whitefield, Marathahalli, Kundalahalli,
K R Puram, Kasturi Nagar, ITPL and Mahadevpura are some of the favorite residential destinations.
West Bangalore, covered by residential localities, is witnessing major developments
in the form of commercial and retail complexes and high-end residential projects.Some of the areas which have come to focus due to recent developments are Yeshwantpur, Malleswaram, Rajajinagar, Matthikere and Vijayanagar.
North Bangalore has been a popular residential destination both for end-users and investors. Developmental activities in these areas have been phenomenal. The region provides easy connectivity to major areas in the city which is one of the main reasons driving the demand in areas like Hebbal, Yelahanka, Ramamurthy Nagar, RT Nagar, Banaswadi, Hormavu and Sahakar Nagar.
South Bangalore is fast emerging to be a favorite region for real estate development. The entry of multi-national companies has boosted developmental activities in this region. Further, the development of NICE Road and Metro Rail connectivity to the region have increased the value for properties in localities like HSR Layout, Sarjapur Road, Electronic City, Bannerghatta Road, JP Nagar, BTM Layout, and Uttarahalli.
Road Blocks to Overcome :
The future of real estate industry in Bangalore looks promising but it is also filled with obstacles and challenges. Some of the challenges can be controlled, while others need intervention from higher authorities. For instance, the recent move by Reserve Bank of India to hike repo rates by 25bps will definitely pinch the realty developers across the country. This step will push financial institutions to increase loan rates which in turn will affect the demand for residential properties.
Another common problem faced by realty developers is delay in regulatory approvals which is often a big hurdle in launching projects. In a country driven by sentiments, political order plays a vital role in defining and governing acts and regulatory bills which needs stability. The new 'Land Acquisition Act' will concern realty builders and developers in India and it may result in subsequent changes in real estate prices and increased costs in project development with lower profit margin.
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