Dynamics of Bangalore Housing Market

spiral-demand-bangalore
The dynamics of Bangalore housing market is changing. The ratio of end user demand to investor demand in housing market is changing with investors capitalizing on lower prices, high rentals and lower rupee value. Along with rising demand, prices are rising too, leading to capital appreciation for investors who are speculating demand.
The rising prices are not denting demand from end users primarily due to Bangalore's demographics and healthy affordability quotient (AQ). Developers are immensely benefited with pre-launches with higher prices, customer advances have increased which results in lower capital blockage.
Bangalore housing market was never an investor paradise market considering capital appreciation was inflationary in nature. But with huge absorption coming in from
  • End users with high affordability quotient ( High paid IT jobs primarily)
  • Investors and Speculators considering high rental yield and favorable USD to INR conversions.
the prices are rising at a faster pace. What we understand is Bangalore housing market has entered the spiral of higher demand (shown in picture above) and prices which is fueled by speculation and good support by end-user demand.
The rising supplies from large townships or projects are getting absorbed sooner than later, mainly funded or bought by investors leading to increase the prices. Many promoters speculate demand by quoting 'X' price for the first 15 bookings and 'Y' price for the rest, this speculates demand and most people ignore that the 'X' price is a premium.