B`lore developers holding back project launches

Potential investors are thinking more long-term.

The present economic scenario and the volatile stock market has caused Bangalore’s property developers to turn cautious and a few of them have begun to hold back new project launches and are slowing down the existing ones due to a lack of funds needed for their execution.

On the whole, the city’s residential property market continue to witness stabilisation in rentals across all markets while the capital values increased marginally in a few locations since the last quarter.

“Developers are too cautious. They are checking supply by holding back new project launches and slowing down the existing projects for want of funds for their execution. This has altered the investment options in Bangalore and it is now more suited to long-term investors; more so for end users than for investors looking at short-term capital gains,” said Cushman Wakefield-India’s second quarter Bangalore-residential report.

“Due to this scenario, the coming quarter is not likely to witness any major changes in either capital or rental values in Bangalore’s residential sector,” the report added.

Rentals for mid-range residential developments in June recorded the highest values in the central locations (in and around M G Road) due to a lack of new projects. The south-east market (Whitefield-Marathalli-Sarjapur), however, continued to witness rental corrections in the range of 4 -11 per cent in the last six months.

The report further said, “The excess supply of all grades of developments, emergence of newer residential locations have also impacted the markets to a large extent. The rising rate of inflation and the present cash crunch has led to stabilisation in rentals across most areas, barring a few projects in both high-end and mid-range sectors since the first quarter.”

As for the capital values, prices of mid-range projects remained constant since the first-quarter; showing a marginal appreciation over the last six months in a few locations like the central areas (1-3 per cent).

In case of the high-end segment, central and off-central locations witnessed a marginal increase due to the limited availability of land parcels and new projects.