It is an established fact that
property prices around any city or town in a developing country will always be
increasing. Industrial and commercial activities attract people to the urban
areas in large numbers. The rising demand for commercial and residential land
causes the cities to swell upwards through multi-storied buildings, and outward
through the development of sub-urban areas. This observable fact is evident in
all urban areas around the globe. Property prices are bound to increase along
with economic progress. But the rate of increase can vary considerably from one
place to another.
Persons who are considering fixed,
short term or long term investments in urban and sub-urban areas should make a
detailed study of the causes for existing prices in the particular area they
have in mind. Speculative investments may trigger a sharp increase in prices
though there are no specific reasons to warrant the rate of increase.A general
guideline that can be applied to assess whether a specific rise in real estate
prices at a specific place is warranted or not, is to check the proportionate
rise in demand for industrial, commercial and residential areas around that
place.
Looked among the largest growing cities
in the world, Bangalore city has seen a sharp increase in property prices over
the past couple of decades. The industrial development of the suburbs has led
to the rise of a large number of affluent businessmen, professionals and upper
middle class in the city, the majority of them not local residents.
The rapid development of the
information technology (IT) sector is mainly credited for the high rate of
increase in property prices over the recent years, but the real expansion
started during the 1970s with the development of huge industrial areas beyond
the suburbs of the city. This gave rise to increased demand for commercial
space in the central business district of the city. The surrounding residential
areas were encroached into and this resulted in the outward expansion of the
city.
Locations that were once considered
far outside the city limits have now become fashionable & lucrative
residential areas. The success and expansion of the IT industry increased the
demand for commercial and residential space within the old city area, and this
led to the upward expansion of Bangalore through high rise structures, and the
process is still going on.
To ensure that the land is available
at reasonable rates for a healthy development of the city, the state government
is taking procedures to check further congestion within the old city limits,
while at the same time providing infrastructure for proper development in the
outskirts. Zoning restrictions have been implemented to thwart haphazard development.
Strict action is being taken to curtail the nefarious activities of
unscrupulous real estate dealers, who produce forged title deeds and other
documents to fraudulently sell property that belongs to others. Even there have
been many cases cropping up wherein government lands were illegally disposed of
in this manner. While genuine property developers are encouraged, speculators
have been restrained from indiscriminately raising property prices. The
government policy is to ensure that property, whether built up or as land, is
available at reasonable rates.
Another major development is the
approval of the Central cabinet for the proposed Bangalore Metro Rail
Corporation Limited (BMRCL) which is planned to cover 33kms in two corridors.
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