Bangalore Realty Set to Soar

The year 2012 has seen stable demand in real estate. Even though the office absorption space was on the lower end when compared to 2011, the residential demand improved. The city has witnessed good volume of launches in over the last two years, which has resulted in significant unsold inventory spread across various neighborhoods. The quantum of unsold inventory will keep pressure on the number of new launches in 2013. The residential market will continue to be driven by absorption in the mid end segment and end users. Bangalore east and north will still be the most sought locations for residential units priced at 60 to 80 lakhs.

Here are a few trends that can influence real estate to soar in 2013;

Economy; With inflation worries easing out, interest rates are expected to witness a correction of over 100 basis points which can result in a 1% drop in home loan lending rates from Banks. This can increase a demand for real estate assets.

Policies; Few policies to look at in 2013 are Real estate regulation bill, real estate mutual funds and real estate investment trusts. These can pump in more funds in the market and the RER bill can be a win-win for builders and consumers.

Infrastructure; The Karnataka state government has released over 16 billion to BBMP for several infra structural projects. These funds will be spent on signal-free corridors, development of roads, multi storey parking near metro's, grade separators, rejuvenation of lakes etc.

In 2013, north Bangalore will continue to grow as a business hub with well connectivity. Projects on outer ring road and Sarjapur road are expected to be completed and will see incremental sales because of the preference for ready to occupy projects by end users. The close proximity to IT corridors will also be a contributing factor. Whitefield will not lose any of its sheen as the market drivers are economic rentals with healthy demand. North and East Bangalore have several aspects going for them, in terms of availability of land, great infrastructure and several office spaces coming up.

Potential emerging neighborhoods in 2013 can be Tumkur road and Kanakpura road. These areas have seen benefits by metro connectivity plans, establishment of NICE road and availability of cauvery water in Kanakpura road.