India’s Silicon Valley, Bangalore, was recently ranked as fifth cheapest cities of the world by the economist intelligence unit’s worldwide cost of living survey 2018. Affordability is a huge pull factor for aspiring home buyers eyeing the city. Bangalore being the fifth largest city of India with a population of 9+ million, is one of the most preferred investment destinations of India. It has been, one of the fastest growing cities of southern India for the past few years and has become a dream city for job seekers from all corners of the country. According to the 2011 census, the city has been witnessing huge number of migrations to the city in search of job and has become a preferred destination to settle down with their families. Since, the city became a major IT Hub of India; it is experiencing a robust real estate development.
The realty market of Bangalore is predominantly dominated by residential and commercial projects; particularly 2 and 3 BHK apartments are consistently on demand. The Potential buyers are constantly looking out for affordable housing which is built with best of amenities. Such expectations and demands from the potential buyers are encouraging builders to come up with highly advanced residential projects which would provide more options to the buyers according to their limited budgets. Affordable housing is on high demand in particular areas like, Sarjapur road, malur- hoskote, kanakapura road, chandapura, electronic city etc. The places are under demand due to the high presence of IT companies around and more over the land price is much cheaper than other areas in the city
According to 99acres, Bangalore has the better pricing in affordable homes segments compared to Mumbai and Delhi. The prices per sq ft in Bangalore are Rs.4500 to 5500, in Mumbai Rs.9000 to 10000 and in Delhi Rs. 6000 to 7000 which makes Bangalore the most dependable and reliable city in the affordable segments.
The builders are also offering reduced unit dimensions for 2 BHK, from 1000 – 1200sqft to 950 sqft, for 3 BHK from 1250 -1500 sqft down to 1200 sqft, which make the homes more affordable for the buyers. Meanwhile, previously unsold inventories are also getting attraction from the buyers due to the lesser price which ranges from 40 to 60 lakhs . The recent announcements on suburban trains and metro play a significant role for creating such demands in those areas. If both the projects get completed, then the commutation becomes easy for the dwellers.
According to the reports, more than 15,000 projects are in ready to move status and most of the flats are within affordable ranges starts from INR 40 lakhs. This has garnered maximum demand from the buyers. It is also well supported by the government schemes like, PRADHAN MANTRI AWAS YOJANA (PMAY), which provides subsidy schemes for the first time home buyers and the implementation of the Real Estate Regulation and Development act 2016 (RERA) which brought transparency between the buyers and developers. The government also encouraged builders by announcing 100% tax exemption on profits for the developers, building affordable homes. Such schemes kindled the interests among the first time home buyers and the NRI’s as well which can yield better returns in the future.
The city has seen a rise in population on a daily basis with job seekers, employee transfers, students and even the launch of new startups. The city needs more affordable homes to accommodate those populations because, most of them belong to mid segment salaried people. They always prefer to stay in budget homes than luxury homes. This encourages even the IT employees to invest in residential projects in the affordable segment, which could yield better returns for them. They can pay the home loan through the rental income.
The city has witnessed a paradigm shift from premium properties to affordable segment housing demands. According to the industry reports, the affordable housing segments reported the maximum number of launches in Q2, 2018. In fact, many reputed builders who were exclusively tailored to the luxury and ultra-luxury segment also showed interested in affordable housing segments in the recent days. The affordable homes will always be on demand among the buyers.
[This is an authored article by Ashok Naidu, Director, Kumari Builders and developers. All views, opinions and expressions are personal and limited to the author.]