Bangalore unsold inventory,
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Unsold inventory of Bengaluru reaches a record high at Rs. 85, 000 crore
23:29
The real estate sector in the last three years was in a lull. With the swearing in of the new government things were expected to change in 2014. The industry was plagued with decreased demand, poor buyer’s sentiment, high prices and a demand supply gap. The unsold stock went on increasing in different cities of the country with Delhi topping the list in the third quarter of the financial year 2014 – 2015. Now Bengaluru tops the list with a whooping figure of unsold inventory of about Rs. 85, 000 crore due to unfavourable market conditions in the whole of the country.
The statistics say that around 84 % of the total inventory is from the segment of apartments alone and the majority of the unsold inventory accounts for the tier I and II builders. The experts, the market watchers and reports from various sources feel that there are chances of slight price correction in the first half of 2015 in Bengaluru real estate.
But the story of the luxury project is completely different and this segment has touched a record pre-sales value of Rs. 30, 000 per sq. ft. in one of the luxury residential projects in an upmarket area of Sadashiv Nagar area of Bengaluru. Few realtors feel that luxury housing is one of the most dynamic market segments with high demand in the market of Bengaluru. In the year 2014 the city of Bengaluru witnessed launches of about 35 big sized luxury residential projects consisting about 6, 000 residential units. In contrast this figure was 4, 200 units in 2013. These luxury homes of Bengaluru are priced between Rs. 10, 000 per square feet to Rs. 36, 000 per square feet on varied locations.
Till a year back the housing sector of the Southern part of India including Bengaluru had remained a bit more resilient to the market changes due to positive macro-economic factors supported by healthy job generation by the Information Technology sector which fostered steady absorption rates across the south Indian cities.
The expert realtors feel that the salaried employees are being a bit more cautious as the economical metrics do not show happy figures. The builders are busy in clearing their unsold stock and are more flexible regarding pricing their new projects. Few builders and construction companies are witnessed to run free EMI periods for few of its middle income housing projects.
18 comments
The unsold inventory roused high and most of the builders are coming with different attractive marketing strategy to clear these stocks as soon as possible. Instead of acquiring more properties for projects they are selling these old projects with a cut off. So is it the right time to invest on these properties or it will come lower further please guide us.
ReplyDeleteHi, if more than 85,000 core rupees worth unsold inventories are there with builders of Bangalore than why people are buying flats from pre launched projects?
ReplyDeletePeople buys flats not the builder, whether it is tire 1 or tire 2. I have nothing to do with their classes, I need a home beautiful with all amenities that I needed. When I am getting all of my requirements from a builder with much more lesser price than why I would pay more. This rise in unsold unit will rise further until and unless they cut some from their profit margin.
ReplyDeleteThis awful practice of reputed builders making luxurious apartments in Bangalore and selling them in high price made the real estate market slowing down. Most of the Bangalore people who are seeking apartments are salaried employed came from different parts of India. The high end apartments are bought by foreign investors or high profiles so builders should concentrate more on budgeted flats that can be purchased by major people of Bangalore.
DeleteI think these rise in unsold units are only because of the huge margin taken by the tire 1 and 2 builders who are taking unnecessary profit margin from there projects. They are playing with there customer pocket because of there brand value otherwise if some builder are selling there flats on the same location with a low price with the same amenities than why these builders are charging more. I think the demand of flats and apartments are still there but customers are tending more towards low budget houses.
ReplyDeleteYes the unsold units only due to the Top grade Builder. Because they set a 1 BHK flats also so high. Always try to make more profit. Most of the rich people are only their client not the middle class people.
ReplyDeleteThe real estate investment going high day by day. Each year its rising in more than thousands units. Its proving the life style of all the metro cities are changing, most of the people are searching for the luxury home to make their life smooth and better.
ReplyDeleteThis is not the case of Bangalore only, there are other metros facing this similar situation as well. In Bangalore the demand for luxurious apartments are coming only from the side of NRI or few Business people where as most of the IT professionals falls under mid income group. Today the rise in unsold inventory are only because of the mismatch of demand and supply rule. Some builders considerably making high end flats for their reputation where as the demand of mid budget flats are more.
ReplyDeleteThe gradually increase of the property is the main reason for this. Most of the tier 1 and tier 2 builder are adding the property value in every months, they are thinking of more than 100% profit in every projects. Some how some builders keeping their prices same even some builders selling the property less than the market price also. In these case the builders are able to sell all of their property.
ReplyDeleteYes, it is absolutely right Bangalore has the record for the unsold inventory. Their is so many reason we can say. First reason is the high price of the flats , people are not getting the appropriate areas and people are thinking they may get cheated by the builder. All these are common that is why Bangalore facing this disparage record.
ReplyDeleteI don't think so that Bangalore has some unsold inventory, because the real estate business are growing so quickly. People are showing so much eagerness for buying a property of flats. yes, it may be done due to the high price of the property.
ReplyDeleteTop builders making luxurious flats are also came to know the market demand and they are coming with the concept of making low budgeted apartments. The solution to these unsold stocks will be by cutting off their profit margin. May be this year we will see some revolution in real estate market.
ReplyDeleteTheir is so much decreasing in demand of real estate due to poor buyer’s sentiment, high prices and a demand supply gap. Most the builder are giving the possession in late after taking the high price. Again most of the people are thinking they may cheat by the builder. These are the reason may be in less selling units.
ReplyDeleteThere are various reasons for unsold inventory, far most important thing is because of the rise in flats cost and making ultra-luxurious apartments beyond demand. Bangalore is the first preferred place for every IT graduates so most of the people living here came from different parts of India. Within their salary range they won’t be able to afford a luxurious apartment so the only choice left with them is to buy budgeted flats. This unsold inventory now will make the builders to realize the demand of market.
ReplyDeleteThe buying power of Bangalore people are increasing day by day so there is no issue if the builders are making luxurious apartments. The unsold inventory is raising because of the sluggish market condition from last few years again these luxurious flats has very high depreciation value so people and investors are less interest to buy these.
DeletePreviously flats are considered as a status symbol and only high class people are living there. But now a days with the cost of living and affordability more people are preferring to live in flats. The demand for flats are still available but the demand of luxurious flats are not much in Bangalore. This might be the reason of hike in price.
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ReplyDeleteGreat Article..! I love your blog post. specially the one on flats for sale in bengaluru
ReplyDelete