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Why Bangalore luxury market will not see correction

Why Bangalore luxury market will not see correction


f you are one of those holding back on your luxury investment hoping for a price correction, you might not see one in the near future. Here are four reasons why - Check out luxury properties in Bangalore High purchasing power Affluent, globetrotting Indians, expats and NRIs with impressive purchasing power are driving the demand for luxury housing ensuring a healthy growth of this segment in Bangalore. Check out Bangalore’s localities “Builders do not feel any pressure just because their inventories are piling up in this segment,” says Kirti Mehta, Bangalore-based property consultant and soft & prelaunch adviser. “Typically, apartments or villas in this segment take about eight to nine months before the prospect actually makes the financial transaction. So even if a few per project get sold, the developer is happy.” More for less “The Bangalore luxury market is affordable as compared to other luxury projects across the country,’’ says M T Manikantan, freelance property consultant, with an experience of over a decade in expat investment. “A super-sized luxury villament or penthouses are in the budget of Rs 5.5 crore to Rs 8 crore here, and come furnished with sit-outs, private green spaces and latest gilded glass separators. You can never hope to get this package in the Delhi-NCR region or Mumbai or even Pune.’’ The average upcoming luxury apartment in Bangalore has a covered area of above 2000 sq ft, with terrace spaces anywhere between 900 sq ft to 1,500 sq ft. “This is equivalent to the area of a standard 1BHK or 2BHK flat in several cities. The buyer thus gets more for less,’’ says Manikantan. Aspirational advantages The target segment wants to realise a dream: of the advantages of the developed nations, with its ambience with a good measure of the Indian upper class advantages. And developers cater to these needs. So you will find specific themes like Spanish, Mediterranean and forest-style homes. However all of them have some typically Indian features, viz, separate entrance for the staff, a separate changing room and toilet for the staff, separate serving area, warming area and main cooking area. “Features like these take space and when you get these at a good price, the market continues to be attractive to the prospect,” says Mehta. Consistent steady increase in value The Bangalore luxury segment has grown steadily in value, with none of the volatility of the other metros. Palm Meadows which was priced at around Rs 35 lakh in the late ‘90s, today commands a price of about Rs 9 crore. “IT NRIs or expats typically are not great risk takers. They are happy with consistent increase and focused on larger space and amenities,’’ says Manikantan. “Most of them are first time rich and the mindset is to invest in steady growth.” Though the time period to reach this price escalation is long, but as compared to the Delhi NCR or Mumbai, it has been a steady increase.

Economic Times

Posted on : 09-07-2014