The Indian realty scene has been quite bleak for some time. Most of the buyers have retreated from buying homes. Property prices have been astronomical for the last few years. And the prices never seem to stop touching new heights every day. This has put many off from coming anywhere near buying a home. There are some policy issues as well which have hampered the growth of the business. All these factors have come together to give this industry a very tough time.
The metros and tier 1 cities have faced the brunt of this slowdown. The tier 2 cities which are more economically than their metro and tier 1 counterparts are seeing some traction. Bangalore falls in the metro category. It is one of the biggest examples of how the slowdown has affected the market.
Bangalore used to be a thriving real estate. It did not face any big insurmountable problems like political unrest (in the case of Hyderabad) or natural disasters (in the case of Chennai) which would have put the realty business here in a limbo. The economy here is mostly dependent on the Information Technology sector and it has proved to be a stable provider of employment. This being the case, the slowdown the city has witnessed in the last few years with sales numbers falling for Bangalore projects can only be attributed to the downward spiral happening to the entire country’s sector.
This city has the third highest amount of unsold inventory in the country. Delhi National Capital Region and the Mumbai Metropolitan Region take the first and second place respectively in this regard. This being the situation, the builders will be weary and not come up with upcoming apartments in Bangalore since there are not able to sell the existing ones. This will come with its own set of problems by creating a supply and demand imbalance in the future when the market does right itself.
Things have further deteriorated with demonetization. The numbers coming out of this city for Bangalore projects is not at all heartening. This process put in place a serious cash crunch for both builders and the buyers. Since there were many limits imposed on the amount of cash one could withdraw and the limits to how much money could be exchanged, a climate of chaos prevailed in the country for a few months. Real estate being a big ticket purchase took a back burner. Another point to note here is the fact that the realty business is not always done within the purview of the laws of the land. So it paid a price because of all these factors.
Though things might not be going the city’s way, there is hope for it. Realty recovery is not too far away. Things can right itself. Interest rates have come down thanks to demonetization. Upcoming apartments in Bangalore can be bought at a better rate. Interest rates can drop further in the days to come. A price correction is also in the offing.
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