Five facts about Real Estate Investments in Metros

The real estate market in the metro cities of India is emerging as one of the most lucrative and profitable investment option. The transformation of developing cities to smart metro cities and megacities in few years have made the metro cities as most preferred locations for the real estate investment. There are several factors which contribute to the growth in real estate investments in the metros. Some of them include the following:

  • The prime most factor of good investment of real estate in metros is the presence of established and reputed multinational corporations. There are many leading companies like Genpact, HP, Nokia, Siemens and Accenture among others that have their branches and offices located in the metro cities. The policies of the liberal government and the dramatic growth of globalization in the economy has developed the metro cities and placed India as one of the key real investment destinations.
  • The second most important factor is the leap in development of infrastructure in metro cities. There communication and transportation facilities are developed as part of the smart city plans and also to enhance a better standard of living in the metros. As such, the real estate investment sector of the metros has also seen a significant growth over the last few years. The transport facilities and the ease of accessibility to metro cities have a profound impact on the real estate of the metro cities. Like in the tech city Bangalore, there are many projects in Bannerghatta Road which have good transportation facilities and the properties also have good amenities for a comfortable living.
  • The flourishing economy of the metros has opened up different opportunities for the realtors to explore their skills and invest money in state-of-the-art projects. This is another important factor for the growth of real estate investment. There has been a growth in development of residential projects, high defined commercial centres, exquisite malls and IT hubs in the metros. The good FDI funds and beneficial real estate mutual funds also further boosted the growth of real estate.
  • Demand of a luxurious property has also lead to more real estate investment in metros. With the standard of living of the people rising up and people looking for a comfortable and luxury standard of living, so the demand for housing units have grown and simultaneously the real estate projects in the metros. One can see innumerable projects providing luxurious bungalows and well facilitated plush apartments as well as condominiums being built in the metros and its suburbs to meet the demands. Also many people from across the country come to the metros for good career opportunities and educational facilities, which have led to a further increase in the demand. In the city of Bangalore itself there are new projects in Bannerghatta Road cropping up for the residents.
  • The property prices of the metro cities are escalating dramatically by leaps and bounds in the last few years. As such, the developers who understood this prospect of an attractive market for real estate investment are now gaining profits. Like in Bangalore, the developers are establishing attractive projects in sites in Bannerghatta Road to earn prospective customers.

Hiking material costs causing alarm with Bangalore builders?

As compared to the rates in yesteryears, demand had picked up for buying houses rather than renting it. But the demand-supply matrix had changed the entire quotation of cost as earlier since the cost of raw material and labor was low, the Bangalore Builders were in the maximum profit. Wherein today as the demand has increased the real time for affordable houses and people are willing to buy the low budget house in Bangalore, builders have no option rather than to work on even the least profit which he can make considering the increasing material and labor costs.  It is a dual hit for the builders and it is alarming, as on one side they need to keep up to the expectation of the customers along with a competition to the competitors. On the other hand, they are suffering from the hiked-up price of building materials. Below is the list of how it is going to affect the common man;

The rate per square foot may boom

 As the number of affordable house in Bangalore is decreasing, people are also ready to compromise with ready to move in flats and studio apartments in Bangalore. The builders have a higher profit margin on the sale of a villa, a luxury apartment, on the other hand selling a low budget house in Bangalore may be the easiest thing but the fewer margins on the profit are what may haunt the builders. Hence, they hardly consider customers who require an affordable house between Rs.20 – 25 lacs.

An unsafe building can be alarming

In case, if a builder is offering a real cheap house in Bangalore in comparison to others, be very careful as you cannot be sure about what may be in the offering. Don’t trust anyone blindfolded rather go through the construction site. Do check the raw material quality, in case you are not that proficient, make a general market survey as a precaution is always better than cure. Saying this I mean buying an unsafe house and inviting an accident is less preferred than buying a bit higher cost house and being safe.

  1. The cost of the raw material may burn a big hole in the builder’s pocket:

As the cost of material used in the building is increasing in proportion to the labor, it will hamper the building industry and will burn a big hole in the builder’s pocket. It may be a case that it does not affect the bug builders equally, but small builders will definitely bear some loss because of this hiking cost.

  1. The low Budget house may become a dream only:

Will you invest your money in something which cannot reap profits for you? Definitely not, so dreaming of low budget houses can be a dream soon as builders may reduce investing the money in the low budget houses in Bangalore. As the low budget houses will reap fewer profits in comparison to that of luxury houses.

To summarize, we can say that a wise advice will be to go for a low budget house right away, in case you wish to buy one in this year. As later on, it may burn a big hole in your pocket.

The challenges of builders in Bangalore

The Silicon City of India, Bangalore has a number of property projects and establishments constructed across the city. There are also a good number of key real estate developers who aim at constructing major establishments in the city. However, these developers and real estate builders are facing many issues and challenges which have act as a hindrance to their projects and also slowed down the construction time of the projects:

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  • Funding: Arranging funds is one of the major hindrance for the real estate developers. The real estate industry in Bangalore has witnessed a huge lack of inflow of the funds in the past years. This inflow has primarily been backed by the low running global economy. The FDI is the real estate sector has also drastically reduced in years that pose a stop to the construction projects.
  • Input costs: Due to inflations, the input costs rise steeply in the market. The real estate sector is both a capital and labour based industry and the rise in total costs of construction materials and the labour work costs act as a barrier for the developers to lower the prices of the unsold units. Also the rise in the cement costs and steel per tonne have also backed the slow real estate sector growth.
  • Financing cost: Developers are continuously facing high financing costs. With the increase in the number of defaulters, the commercial banks act tight to lend finance to the developers. As such, they ultimately rely on borrowing money from alternate sources with a higher interest rate, which simultaneously raises the property prices. This results in many unsold ready to move flats in Whitefield staying in the loop without any customers interested in buying them.
  • Demand and Supply: There is a widening gap between the demand as well as supply of good homes in Bangalore. There is a major shortage of urban housing in the city in comparable to its never ending demand by customers who look forward to owning an asset in the tech city. However, there is a difficulty in emphasizing the build up of affordable housing. The Central Government has stated that the developers need to well reserve 20% of any particular developed project for good affordable housing. This means that the additional burden on the developer can be passed on the rest 80%.
  • Speculation: A speculation in the property and land prices has given rise to the unreal price of the real estate market in Bangalore. This overpricing has simultaneously deterred the customers from purchasing homes leading to many unsold units. This situation is hugely blamed on the Foreign Private Equity funds as they seek a high return amount within a short time period.
  • Lack of transparency: A short of transparency is another major factor restricting realtors and real estate developers. Illegal land encroachment, a lack of an efficient regulation act is a deterrent to the foreign investors who look to invest in the real estate market of Bangalore. A good and independent body regulating the land prices as per the efficient international standard is the urgent need of the real estate market of Bangalore and India.

Is Bangalore real estate market going to shine in 2018?

The real estate market of Bangalore is vast with many establishments and properties under its belt which are spanned across the tech city. There are both residential and commercial spaces in Bangalore which get sold like pancakes by buyers. Not only citizens from India, there are also non resident citizens who own properties in Bangalore, look to buy flats in Bangalore and own their valuable assets of property. The coming year of 2018 would definitely see an upward trend and shine of the real estate market of Bangalore.

The Bangalore real estate market includes flats in Bangalore, apartments, BDA flats in Bangalore, villas- both residential and commercial sprawling across the city. There are also furnished flats in Bangalore where the houses have all modern amenities along with furnishing and furniture already equipped from before. With every facility available nowadays, the buyers look for houses which give every amenity without them having to worry about any shifting and all. As such, the developers too have created magical and wonderful furnished properties for them. The real estate market, however, witnesses a demand for the 2 and 3BHK residential apartments in Bangalore.  Bangalore is one of the most preferred property destinations in India due to its fast developing rate and also because of multiple amenities which are available in the city. There are many IT companies located in the city which makes it a more attractive hub.

The real estate market and properties in it can be divided into three major groups- the luxury housing group, mid income housing group and the affordable housing part:

Luxury housing: Bangalore has many luxury housing properties solely due to the increasing demand of top notch residential properties. Silicon City in Bangalore located in the northern part of Bangalore has the maximum villa properties and projects in line. There are also many apartments in Bangalore in this sector.

Mid income housing: This type of housing and properties are mainly owned by professionals of IT sector. The buyers of these housing and new flats in Bangalore part primarily look for the facilities and amenities which help them in their day to day life. Be it the proximity to an educational institution or a medical facility, the people related to this group looks for the good facilities.

Affordable housing: For the buyers who evaluate the price of properties a lot, there is the affordable housing and apartments in Bangalore. These property projects are located mostly in the suburban areas and the budget for this housing type is also high.

Despite the demonetization which affected India and the real estate sector in particular, Bangalore also witnessed a change or a slight reduction in purchase of properties. However, with change and acceptance of the new policies and methods, the real estate market in Bangalore has prospered again and is expected to shine and be on a high in the coming year 2018 too.

Tips to buy property in Bangalore in 3 easy steps

Follow 3 easy steps to own a suitable property in Bangalore

If you have no previous experience in dealing with real estate property, the process may seem complicated. It is true that in some aspect it is a daunting task, but buying a property follows some rules which make the process rather systematized. You have to be a bit assiduous and knowledgeable to grasp the best deal. You may have to spend months to find the flat or apartment that you or your family members were longing. Sometimes, you may feel tired and desperate to acquire anything that comes next. But all these are part and parcel of buying a property.

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Characteristics that will make you successful

New projects and ready to occupy apartments in several sites in Bannerghatta road or elsewhere may seem appropriate for your lifestyle, yet don’t take any decision in haste. It is a major financial decision that has a huge impact on you as also your family. So, be insightful in decision making and consult your family members and colleagues before taking the final decision. You should know certain things before dealing with developers and middlemen in this sector:

  • Always ask the question directly and crosscheck the answer whenever necessary. Don’t keep any doubt while buying a real estate property, it may be disastrous in future.
  • Deal smartly. It is necessary to state your price to the property owner particularly if it is a resale property. In the case of big housing projects too, never get satisfied with what the developer has been offering. Crosscheck what other buyers are getting or how they are dealing with the same condition.

3 easy steps to buy property in Bangalore

Here are the 3 steps to ease your property dealing process:

Step 1: Make the house hunting process easy by narrowing down your choice. It is easy, sit with your family and decide what kind of apartment and environment you all are looking for. Several new projects in Bannerghatta Road and several other new locations are underway. Narrowing down your preference will help you to select a suitable one from these ongoing or existing projects in Bannerghatta Road and other places.

Step 2: Apply for a house loan without delaying much. It may take quite some time to sanction the loan after meeting all modalities. Different banks have different types of offers and conditions. So, do a bit research and then apply for the most suitable one. You may have to pay several visits in this process.

Step 3: Decide how will you find a house? You may contact an agent or contact the developers directly. You can also contact the existing owner directly. All channels have some advantages and disadvantages. An agent can give you lots of options and save much of your precious time. On the other hand, contacting directly the present house owner can save some amount if you can deal smartly. So, understand your capacity and then decide a suitable process. If you have sufficient time in hand, you can explore all the three process.

Are ready to occupy flats a good choice?

The choice between ready to move in flats or under-construction properties needs to be thought through. If you find a good property in a location of your choice, it is likely you bypass ready-to-move in property. But, considering the present situation of delays in property possession, it is not always wise to invest in an under-construction property.

There has been a steady rise in demand for ready to move flats in Kengeri and other areas of Bangalore like Whitefield. While both locations are a contrast; Kengeri is a suburb location of Bangalore with a laid-back environment of coconut trees surrounding the area and Whitefield, a very famous, upcoming yet developed area of the city. This rise in demand shows an interesting trend in the realty sector.

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There are many reasons for home seekers to invest in a ready to occupy flats in Kengeri for example.

  1. Ready to occupy flats indicate a positive trend of reality investment in the said locality. It means that people are staying there and the occupancy is good. Property buying has reached to the next level if a realtor is offering ready to move in flats. The buyer also has an advantage of sourcing information through recommendations and word of mouth publicity.
  2. Another major reason is the convenience of moving into a fully constructed flat. It means the basic amenities are in place. It also means that the area and your neigbourhood is completely developed. There will be schools, hospitals, commuting options in the vicinity. In other words, you are paying extra-money (if at all) for instant comfort of shifting to a new home.
  3. When you are investing in a ready to occupy flat, it is obvious you are not making any compromise like staying in the best locality, having recreational facilities which you desire, or checking on security. So, thus the benefit of buying a home close to your office is your prime option too. The sooner you shift close to the office, the luckier you are.
  4. Ready to move in flats are mostly ready for possession too. It means you don’t have to wait for long to switch to your desired location. It is hassle-free in comparison to investment in under-construction project. Even the reputation of the builder cannot get a possession in time, if it is not meant to happen.
  5. When you are investing in a ready-to-move property, you know the house structure exactly. In other words, it is evident to you what you are buying. You can buy an appropriate size flat depending upon your personal requirement. It saves you a lot of time in searching for a property.

While all this means a positive feedback for ready to occupy flats, one important thing is to do a ground check on the facts. It is advisable to seek recommendations, and also, check on the construction quality of your home. You should not get anything less than what you asked for, especially when huge money is involved.

Tips to buy property in Marthahalli

Marathahalli in the south east of Bangalore is a sought after property location. Many projects in Marathahalli in this suburb location have been launched in the past few years. The various sites in Marathahalli are close to the outer ring road, Whitefield, and more prominently, the Electronic City.

There are existing and new projects in Marathahalli which is pulling the buyer to invest here. So, how do you know which are the best sites in Marathahalli?

We share few tips to buy property in Marthahalli:

  1. There are ready to move in flats of all sizes available in this suburb location. It is recommended to buy a flat of your choice by comparing online prices as the first step. Depending upon the built-up area, you can buy a suitable apartment for yourself.
  2. There are reputed builders offering a flat in the area. It is advisable to do a background check of the property you choose to buy. Again, you can use the internet or seek professional service of a real estate agent.
  3. There are many new projects in Marathahalli which may be under-construction too. It is important to seek clarification from the developer and know the exact time of possession.
  4. Before you invest in one of the sites in Marathahalli, it is good to study the locality trends. There is lot of infrastructure growth happening in the area. The prices are likely to appreciate, and this also means, you need to invest in time so that you don’t end up paying more for the same piece of land.
  5. Since there is a wide variety of residential investment options available, make sure you get maximum returns from your investment. While buying the property, you should keep a tap on the recreational and day-to-day facilities inside the gated society. It should ideally include a children play area, swimming pool, gymnasium, and other outdoor facilities. In addition, there should be a smooth operational lift, security, 24×7 power and water supply.
  6. Suburb locations are likely to offer very spacious flats. So it is good to observe the common areas and other living luxuries offering in the neighborhood too.
  7. Keep a check on the construction quality, which you can do by following certain steps. Check the quality of walls construction, bathroom and kitchen fittings, windows and doors fittings too.
  8. Also, check the occupancy factor when you decide to invest in a residential property. Higher the occupancy better is security and maintenance. It also helps the trust factor that you are investing in the right project.
  9. Word of mouth recommendation is your best shot. If you know somebody living in a society in the area, it is good to do a reference check, talking about the general locality areas and do a first-hand mapping of living in a society.
  10. Also, keep in the mind the commuting time to your office. Marathahalli has the benefit of being in proximity to outer ring road and IT Park. Still, it is good to do a connetivity check, by seeing the public transport in the area.