Friday, 24 July 2015
Bengaluru to Witness Demand for Small Sized Apartments
Bangaloreans seems to have developed a penchant for high-end residential apartments and luxury lives.
However, an in-depth analysis of the real estate sector in the city seems to have projected that it is not clearly the case! High-end residential apartments have fallen from favour for the general mass across Bengaluru. According to industry insiders, the recent months have seen a general shift in the trend of preference for lower priced apartment over high-end residential apartments.
Nonetheless, the contribution of the city’s IT sector towards the real estate has been dipping to a large extent in the recent times. The figure has seen a downturn from 40 percent to 30 percent over the months. Earlier, the figure used to be 40 percent plus!
Small sized apartments have also witnessed a slackening in volume; around 14 million square feet of commercial space was absorbed last year and 17 million square feet more is expected to be absorbed this year.
The influx of outside players is going to impact the inventory for sure, with variations ranging from player to player. Nevertheless, the price cut is not going to be much impacted in the days to come. In fact, industry maverns expect a 10-12 percent hike in prices. Factors such as surge in price of the land, cost of labour and approval costs will be the major drivers in this segment, managing to keep the prices high.
The industry trend has seen people opting for smaller or low priced apartments,lieu of the high-end residential apartments instead of waiting for the prices to come down, thereby escalating demand. This way, overall square footage is slated to keep increasing in Bengaluru through this year and keep up the momentum in the near future. This has in turn, led the real estate players to hold on to their current rates at the time being, instead of opting for slashing prices and pushing the volume of sale.