Real Estate Severely Hit in Bangalore

        Real estate developement in Bangalore and some of the other important cities of the State such as Mangalore, Mysore and Hubli-Dharwad has been severely hit with hardly any buyers for apartments. 

        The global meltdown is said to be having a disastrous effect on real estate business in Bangalore, one of the fastest growing cities. Housing here has now entered the buyer’s market, in contrast to what prevailed during the boom period when people desirous of shelter were at the mercy of sellers. Apartment prices, particularly on the outskirts of Bangalore, have taken a major beating given the fact that discounts, freebies and even a special interest rates for housing loans (with a certain per cent of the interest paid by the seller) are not bringing in customers. 

        Sources in the housing sector told The Hindu that “indications showed that the people now feel that real estate prices have touched realistic levels, given the response to advertisements for apartments over the past fortnight”. It is another matter that the discounts being offered on the outskirts of the city, ranging between 15 to 35 per cent, based on the location of the property and the amenities provided therein, have not produced the desired responses. People are now in a “wait and watch” mode with the hope that the real estate market takes a further dip and they can step in at that time.

        There are nearly 10 major and about 100 small apartment builders in Bangalore, with very few of them extending their operations to tier-two cities. Apartments are in demand only in Bangalore as independent houses are not very expensive in tier-two cities. Most builders are facing a crisis with hardly any buyers for apartments. This has had a cascading effect on material suppliers to the building sector, with builders unable to clear their dues. Some of them have gone back to the old system of bartering their flats to settle dues of suppliers.

        The apartment price band about a year ago was between Rs. 2,500 and Rs. 12,000 a sq.ft. The maximum hit is in the luxury segment — between Rs. 5,000 and Rs. 12,000 — although apartment builders in the core areas of the city such as Sadashivanagar , Malleshwaram, Cantonment areas, Koramangala and Indiranagar are still holding on to their price tags. The supply here is less than the demand and consequently builders have been dictating prices, more so, with the land values being very high in these pockets. However, apartments on the outskirts of the city — Hosur Road and all areas adjoining Electronics City, Sarjapur Road, Whitefield , Marathahalli, Yelahanka, Hebbal and Kengeri have been affected with the supply being higher than the demand. 

        While flats in the core areas of the city are purchased for immediate occupation, those on the outskirts are normally termed as speculative investments