After rains, property prices are in for sharp correction

After rains, property prices are in for sharp correction
New Indian Express

BANGALORE: The price of land along the coast fell sharply after the tsunami strike in Tamil Nadu.

If not on the same scale, the prices of plots in Bangalore are undergoing a correction after the recent rains.

If realtors are to be believed, the property prices in HSR layout have taken the biggest hit.

They had reached their unbelievable peak with cream of Bangalore including politicians, bureaucrats and businessmen, preferring to live there.

Corner plots commanded as high as Rs 4500 per square foot. The drop is almost as sharp as Rs 1000, agents say.

A similar fall in prices has occurred in JP Nagar VIII stage, Banashankari, off outer ring road (ORR) and in the layouts developed in the city municipal council (CMC) areas.

According to an analyst, the recent rains have exposed the gaping holes in residential layouts, helping property buyers with better information on the quality of plots they intend to buy.

Exposed the most for the lack of infrastructure are layouts in the CMC areas in the eastern parts of the City. Both BDA and private layouts in Bommanahalli CMC area have suffered in property valuation.

“A bulk of sites in CMC areas have lost their attraction,'' a property dealer said. The residents paid betterment charges but did not get anything in return, he said.

According to one real estate dealer, the plots in the newly developed BDA layouts such as Visveswaraya layout, Vrushabhavathi Nagar (BSK VI Stage) and Anjanapura layouts all have suffered equally in terms of demand.

As it is, these layouts lack good roads and water logging in many places has only robbed them of their sheen.

“I had applied for a site, but the BDA has allotted me a swimming pool,'' an allottee said, half in jest.

In short, the sites in low-lying areas have taken a big hit in prices. That some of them also lacking in decent roads and drainage has caused additional drag on their valuation.

The sentiment among people till the arrival of rains was to somehow own a plot in Bangalore, at any price and anywhere as asset prices had been rising anyway, irrespective of the swings in the economy.

The same crowd is now circumspect in its approach to real estate deals.

Equally interestingly, prices for “flood-proof’” sites have earned some credibility and remained stable.