Mid-range properties look up again

Rentals of mid-range (Rs 3,500 to Rs 6,000) residential properties in Bangalore’s south-east (Sarjapur Road, Outer Ring Road, HSR Layout) is up 7 per cent during the last three months. However, in the other parts of the city, mid-range properties were the first to react to the sluggish market conditions and have seen values coming down by 2-3 per cent.

This sudden rise in mid-range property rentals in the south-east is attributed mainly to the large supply of commercial office space which is facilitating ready-to-move in residential developments for the floating working population and improved social infrastructure.

“This has led to adequate available, coupled with overall subdued demand, tenants in most cases today have more bargaining opportunities over landlords,” Aditi Vijayakar, director-residential services, Cushman & Wakefield India said.

The mid-range markets of Whitefield and Marathahalli saw about 12 per cent depreciation over the last six months on account of an over-supply. On the whole, the trend of the last quarter, rental values across the city in most markets remained stable.

According to Zahed Mahmood, director, Sliverline Realty, “Values of property under construction have seen a fall in the range of 2 to 5 per cent where as there has been a reasonable demand for ready to occupy properties.”

With regard to capital values over the last six months, high-end units witnessed 1-3 per cent rise whereas mid-range properties appreciated 1-2 per cent in the south-east, north, south-west and off central locations of Vasanth Nagar, Richmond Town and Indiranagar.

North-west and off-central regions of Cox Town, Frazer Town, Banaswadi and Benson Town witnessed stabilisation over the last six months whereas the eastern locations of Marathahalli, Whitefield and Airport Road recorded a 3 per cent drop.

Confirming the sluggish market conditions in the city, Hemang Rawal, managing director, Samruddhi Realty, said, “Rates in central areas have stabilised mainly due to lack of demand and if sufficient demand is not generated in the next six months, rates may further fall by 5-7 per cent.”

“While the market is largely expected to remain stable, few locations like east and south east are likely to see a drop in purchase values. In the rental market, north and east are expected to see a correction. The days of heady growth are over as capital values stabilised over the last three months across the city. An over-supply situation in Whitefield and Marathahalli led to a correction in these areas. If the present trend continues, capital values are likely to expect a further correction in select areas,” said Aditi Vijayakar.

“There has been a progressive demand slowdown in Bangalore’s residential market over the last three quarters which has led to an alternative option for end-users to purchase property from the secondary market, where investors have been exiting stock acquired over the last 2-3 years.” he added.