Real Estate – slow down in demand?

The much anticipated but never talked about slump in real estate prices seems to be arriving. A short journey around all those places which were hub of construction activity gives a good idea.

The big slump in demand is evident from all those high rise apartments that are complete and waiting for buyers. Two years ago when Prestige group launched Shantiniketan project near ITPL, it was sold out on the same day when the bookings were opened! Things are much different now and the demand-supply equation seems to be tilting towards buyers. It is easy to find a ready apartment in areas like Marathahalli-ITPL stretch, Bellandur-Marathahalli stretch and JP Nagar 7th Phase. There has been word that it is a similar story in Mysore, where land prices had shot up considerably a year ago but there are few takers of late. But of course, no one wants to talk about it, be it developers or even the media.

However, prices, though have remained stable, do not seem to have come down much along with excess supply. And there are plenty of new projects coming in too. North Bangalore is now becoming a new hub of construction activity. It might probably take a few more months or even a year of low-demand until the prices start looking down. Or if there is a fresh wave of demand like last few years, a reduction in prices may never happen.

Have you been house hunting lately? What are your experiences?

10 Comments so far

  1. randramble (unregistered) on July 29th, 2007 @ 10:49 pm

    Good to see you bringing out something that MSM has chosen to hide, that too on a hot topic in Bangalore. That’s why blogs are special. Awaiting comments from readers…

  2. chethan (unregistered) on July 30th, 2007 @ 12:47 am

    Sales definitely aren’t as fast as they were. A flat I had bargained for, a few months before is still available, for a lesser price. I would expect a marginal reduction in prices, if not a slump.

  3. silkboard (unregistered) on July 30th, 2007 @ 9:27 am

    High interest rates could be one of the reasons buyers are willing to wait. Everyone expects rates to come down real soon. Why not wait a few months then?

  4. shande (unregistered) on July 30th, 2007 @ 10:35 am

    Appreciating Rupee may be one of the reasons, as people earning in dollars(esp. NRIs) would have put their investment in real estate on hold.

  5. Rajesh (unregistered) on July 30th, 2007 @ 10:47 am

    On more important aspect is that most of the investors are NRIs, unlike other cities the local investors have much more share thsu if they decide to opt out the rates fall, in here story seems to be otherwise…

  6. Venkat (unregistered) on July 30th, 2007 @ 7:32 pm

    Is there any website or something where i can keep tabs on blore’s real estate prices??

  7. S.Rajagopalan (unregistered) on July 30th, 2007 @ 9:32 pm

    Obviously the supply far exceeds demand in areas like Whitefield, Marthahalli,Sarjapur Road and Bannerghata Road. But there is a conspiracy of silence by the developers-media nexus. But the cat will soon be out of the bag and the prices will come down by 15 to 30 per cent. This inevitable development cannot long be stalled. The developers will have to come to terms with the fact that properties cannot continue to be sold at jacked up prices by hype.

  8. Krishna M (unregistered) on July 31st, 2007 @ 10:59 am

    This month (being ashada) has brought real estate to a grinding halt. I’ve also noticed though that the number of ppl looking out for a house in jayanagar and jp nagar have reduced. but the prices here havent gone down though. wonder whether that would happen :?
    People have been predicting downtime in realestate from a looong time.. lets see when it actually comes..

  9. Well Wisher (unregistered) on August 2nd, 2007 @ 10:20 am

    The hunt for housing is more of an investment than for occupation of the house.

    The conveniences from a trade store to a super mall is close to home most of the time.

    The ready availability infrastructure and services is an issue. These are overstretched to the limit, be it, transport, communications or electricity and Water. A city like Bangalore has power cuts of 2 to 3 hours a day,generators are a must.

    Getting new telephone lines require a considerable lead time, the trade off with the private sector operators is the premium price differential.

    Transport, the citys’ population growth is accelerating.

    Water, most of the population buy lorry water for every day use besides drinking water.
    The sewerage system is limited to proper Bangalore and outskirts have their own including open drainage.

    The services of domestic help are in high demand and expensive.

    The realty strikes when people start living in the city and the question triggers is with all these conveniences and inconveniences, is the price a fair one…

  10. vishwa (unregistered) on August 11th, 2007 @ 10:55 am

    Those who had the money have already bought or booked their flats for self use or as longterm investment. The apartment prices will fall when the short-tem speculators start selling. Many wanting to buy for self use, may be waiting for this to happen. How long can the speculators hold on is what will count? The question is what % of the apartments are with the speculators.

    Land prices are going steady.Here again most people seems to be speculative buying and mostly in the outskirts.As investments cost less than apartment, speculators are likely to hold on for longer periods.

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