The
demand for one bed room, 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 of the real estate industry in the ensuing State/Central
budget.
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