Real estate prices to drop in tech capital

Real estate prices to drop in tech capital
Tuesday December 4 2007 09:20 IST

Basavaraj Itnal

BANGALORE: Have you seen those advertisements offering premium cars and other goodies if you booked a flat? Does that indicate any downslide in real estate prices? Yes.

Buying property in Bangalore is going to be a little easier on the pocket as the real estate prices are going through a self-correction phase.

While the prices on the high end of the market are stabilising, there would be a correction to the extent of 5-10 percent at the middle of the band.

This is largely due to improvement in connectivity due to Metro Rail opening up more real estate space.

Shankar Shastry of Sterling Developers told this paper that there would be certain correction in real estate prices over next few months.

But this would be limited to specific segment of developers and to certain areas of city.

“The market would go through a correction phase largely due to selling of flats bought as investment and due to opening up of more space,” he said.

Shastry however said opening up of space would not necessarily increase the supply.

“Why should a builder construct more apartments only because more space is available? He would always match the supply to the demand,” he said.

The properties that were priced higher than market tolerance would come down, he said. It is this segment that is offering ‘goodies’ for booking a flat, he added.

Shastry said price correction would affect the properties coming up in Greater Bangalore area and around the outer ring road.

On the other hand, president of Karnataka Ownership Apartment Promoters Association (KOAPA) Balakrishna Hegde maintained that better infrastructure always led to appreciation and not downslide.

But he agreed that prices have been on a plateau in 2007.

“Bangalore is still at the top in terms of job creation and real estate prices are still cheaper when compared to Pune and Mumbai. That would drive our market,” he said.

An IT professional working in Whitefield would not prefer housing in Yeshwantpur despite Metro, he added.

However, Bangalore Development Authority (BDA) commissioner M K Shankarlinge Gowda felt that it was a welcome development.

He said that if the developers did not supply more flats in Greater Bangalore, BDA would meet the demand.

“BDA has proposed apartment complexes in its new layouts. The project is awaiting government nod. Metro Rail and expressways would certainly make it easier for professionals to stay at one end of the city and work at the other,” he said.