Some good news on the housing front
RANJANI GOVIND
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There is an increase in the number of buyers in the mid-segment category
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For the future: Metro and road development plans could propel the real estate sector in the coming months
“The last three months in Bangalore have seen a positive growth in the sale of housing units,” said Ramesh T. Jogani, CEO, Indiareit Fund Advisors, at a press conference that saw the company’s launch of an analytical report on the Bangalore real estate sector.
The report is based on a consolidation of information received from developers, end-users, corporates and commercial and land-data. “The mid-segment (Rs.2,800-3,200 per sq.ft.) in the residential category is fast seeing buyers compared to the sales in the last two quarters,” said Mr. Jogani.
Another key finding as per the report is that the recessional prices had Bangalore developers seeing 50 per cent of their stocked-up spaces being bought, although blocks of apartments in several areas have remained empty since a year or so. Better interest rates, lenient sanctions from home financiers and the correction in prices have all proved beneficial to this segment. The scenario is good for the one-bedroom economical category too. High-end villas, on the other hand, have to wait for better demand.
The private equity firm’s real estate analytical study follows a close-ended domestic venture capital fund scheme launched recently which focussed on investment in real estate.
The 11th Five Year Plan has reported that the housing sector showed a shortage of 25 million homes at the all-India level, said the report. How does one explain this disparity? There aren’t enough homes for the poor segment but with respect to the upper middle category, the scene is encouraging in the post-recession days. Builders in Bangalore now have about 15 to 20 per cent of their completed projects awaiting sale. The last quarter has seen a lot of pre-sale activity that helps developers take up projects for completion. “So, residential investment is no longer toxic or a dead asset,” Mr. Jogani said.
Commercial scene
The commercial scene is a disaster as the vacant spaces and the large over-supply runs to 15 million sq.ft. The reason is the distressing scene of the IT sector that had potential buyers, but squashed due to recession. The turnaround for the commercial sector would be in 2011, according to the report. Infrastructure projects, including Metro and road development plans, could provide the next level of real estate push in the city, both for residential and commercial segments.
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