Realty consultants say buying now makes sense, as there could be no fall in prices in near future.
Estimates by real estate research firm Liasas Foras state that property sale has gone down by 14% in Bangalore.
While industry data had recently pegged the number of unsold residential units in the city at a little over 50,000 units, from a combined strength of 86,761 units that were launched in Bangalore since 2010.
Of late, projects in the city are also taking a couple of years to sell out, compared to the one and half to two years time period new projects would need earlier to sell out completely.
But this piece of news is no good news for buyers as far as prices go. Realty experts say despite the drop in sale, price will remain firm, and might even see a rise.
According to an expert from a realty consultancy, the current price of Rs5,000-6,000 per sqft in Bangalore is “reasonable”. “So a 1200 sqft 2BHK costs Rs60 lakh. Adding the registration and other costs, it goes upto Rs70 lakhs, which is reasonably good in Bangalore, where exponential growth is being seen in terms of construction,” says the expert.
And it is this “exponential growth” that is leading to a drop in sale, rather than the pricing.
“The inventory is high in the city,” says Naveen Nandwani, executive director, Cushman & Wakefield.
Experts say the scenario where maximum sales would take place during the time of project announcement has changed over the years. Buyers are no longer jumping to make bookings just because a new project has been announced.
But “prices remain reasonable” says experts. “Therefore to expect a drop in prices, due to a drop in sale, will be making an incorrect assumption in a city like Bangalore,” says the expert from the consultancy.
Industry estimates suggest the number of vacant units in Bangalore have been rising steadily over the years. In 2008, unsold units numbered 14,636. This increased to 31,369 units in 2011, which grew to 50,184 units in the first six months of 2013.
“The increasing number of nuclear families, migration etc drove the growth of the residential real estate market in Bangalore. However, there has been a demand supply mismatch, leading to piling up of inventory,” says Srinivasa Reddy, assistant VP, research, at property consultant firm Jones Lang LaSalle.
Experts advise buyers to take a firm call on whether or not to buy, without paying much heed to what the future holds. “We don’t expect a price correction. So if you are planning to buy, avoid dilly-dallying. Bangalore is not a market that will see any fall in prices,” says the expert from the consultancy.
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