Saturday, March 29, 2008

Residential market: Set for more growth

Residential market: Set for more growth
Poornima B V outlines the housing market conditions and drivers set to play a significant role in the development of this segment

The residential market in the city is upbeat, both in suburban and peripheral locations. The central business district (CBD) continues to cater to the demand for the premium segment at a steady pace while the suburbs have largely catered to the middle and upper middle income segments, offering large residential units with amenities like large open spaces, sports facilities and clubs. The development of an IT corridor in Whitefield has had far-reaching effects on the housing sector as well. The increasing demand for housing can be attributed to large scale migration of IT professionals, new employment opportunities and rise in corporate activity like expansion and relocation of companies, which has continued to put pressure on housing.
The real estate sector in the city is on a constant growth curve. The capital values in the Bangalore residential market have gone up by 3-12 percent since the last year. Micro markets in and around the CBD areas like Langford Town, Lavelle Road and Brunton Road have witnessed an appreciation in capital values by nearly 12 percent due to limited availability of new residential developments and land parcels. In the peripheral locations, however, availability of large land parcels has led to the development of theme-based luxurious villas and high-end residential enclaves. Several integrated townships projects are being taken up by builders. A mega township is coming up near Devanahalli with 1,000 exquisitely designed bungalows. A Vancouver based company is coming up with a huge residential project near the new international airport.
A supply of approximately 10 million sqft is expected in this region in the next two to three years. The average capital value here ranges from Rs 3,000 to Rs 5,000 per sqft. The availability of large land parcels and improved connectivity due to the four-laning of Bellary Road and the proximity to the international airport are the major growth drivers here. Real estate prospects in areas like Sadashivanagar, Jayamahal, RT Nagar, Hebbal, Bellary Road, Dasarahalli, Jalahalli and Tumkur Road are likely to benefit from this in the coming years.
The improvement in road connectivity from Hoskote, Whitefield and Tumkur Road to North Bangalore will also result in increased residential development along this stretch. Major developers are planning huge projects here. The Metro is also likely to play an important role with increased residential developments surrounding the terminals along the metro route.
The average capital value in locations like Jayanagar, Bannerghatta Road, Banashankari, Kanakapura Road, HSR Layout, Hosur Road and Koramangala varies from Rs 3,000 to Rs 6,000 per sqft. There is a high concentration of residential projects along the Sarjapur-Outer Ring Road due to its proximity to the IT corridor. The Bangalore-Mysore Infrastructure Corridor project and the upcoming Knowledge City have attracted prominent builders and developers to this region. There are major residential projects coming up along Kanakapura Road too.
The upcoming international airport and road projects being taken up to increase connectivity will give further impetus to the real estate sector here. Developers have acquired large land parcels in and around Devanahalli, Bellary Road and Hoskote for integrated townships and residential enclaves. Anticipating the potential of the residential market here in the city, the government has planned to set up five satellite townships, promoting the 'walk-towork' concept. An integrated township is being planned in Bidadi.
High investment returns from the residential sector is another driver for augmentation of the residential sector. With more developers entering the market, the residential skyline is likely to witness a fresh dose of growth, especially in Bangalore North and in peripheral locations around the city.


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