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Bangalore's residential realty market is set to change drastically when lower segment (below Rs 20 lakh or Rs 2 million) properties hit the market in 2008.
Addressing a press conference here to announce 'Reality 2007' organised by the Karnataka Ownership Apartments Promoters Association, president Balakrishna Hegde said, "A few Bangalore developers have already begun to work on an entry strategy for the lower segment and are expected to hit the market sometime mid 2008."
"About three to four Bangalore-based developers have already approached various state government agencies and may launch projects in 2008," he added, without naming the developers.
The city is experiencing a demand for 50,000 units (both flats and houses) per year and the property market is no longer dependent on software and BPO employees alone. "As per the bookings taken by developers in the city, people working in other sectors like biotech, NRIs, high networth individuals (HNIs) and research institutes and companies have come in large numbers," said Hegde.
"Based on the demand and bookings made, there are 1.5 lakh (150,000) units under construction to be ready for occupation in the next three years," he added.
Bangalore realty prices are expected to rise by 12-15 per cent in 2008 due to a surge in demand. The rise in 2007 was lower at 7 to 8 per cent due to interest rate volatility and abundant supply from several projects hitting the market.
"The market in Bangalore has stabilised in the last six months and also matured with the composition skewing towards actual users rather than investors as seen in the earlier years," he said.
"Due to high growth and market stabilisation, the city has been attracting huge foreign direct investment. So far the city has attracted 25 to 30 per cent of total $100 billion FDI which came to India in 2007."
The biannual 'KOAPA Realty Expo 2007' is on during December 8 and 9 at hotel The Grand Ashok. This two-day event has attracted 45 property developers and 5 housing finance institutions.
Speaking on the NRI market and foreign investment, Suresh Hari, secretary, KOAPA said, "There has been an increased interest shown by NRIs, especially from West Asia, the US and Singapore. Also a few foreign groups are trying to make their presence felt in the city. There is a considerable amount of foreign funds waiting to be pumped into the sector which will ensure a better quality of real estate bringing newer technology and it will speed up construction. All these factors according to me should herald an era of the steady growth in the coming months."
