Even as residential markets across India remained stable in the third quarter 2008, a progressive demand slowdown was witnessed in Bangalore's residential market, says a survey.
A slowdown in the economy, depleted market confidence and plummeting stock markets continued to affect the sentiments of investors and second home buyers, according to a recent survey, carried out by Cushman & Wakefield.
Most home buyers, investors or end users have postponed their purchasing decision in anticipation of a price correction, thus bringing stagnancy in quantum of sales across most major markets. Mid-ranged properties in the suburban locations have been the first to react to the sluggish market conditions.
Capital rates over the last six months for high end units witnessed one to three per cent increase, whereas mid range properties appreciated by one to two 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 stabilization over the last six months.
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 survey said.
The survey also revealed that Chennai city has witnessed 0-7 per cent increase in capital values for high end projects, rentals escalated by 9-18 per cent in the South locations of R Puram (13 per cent), Boat Club (18 per cent) and Adyar (nine per cent) due to the limited availability of high quality properties coupled with increase in land rates and renegotiations of rental contracts.
Mid-range projects in Rajiv Gandhi Salai witnessed eight per cent quarterly increase in capital values. Over the last six months the city has witnessed significant rise in capital rates, the highest recorded being a 55 per cent appreciation for high end projects in Nungambakkam.
The high-end projects in Chennai are expected to continue witnessing strengthening of capital values.
Aditi Vijayakar, director, residential services, Cushman and Wakefield India said, "Most markets are predicted to continue to have stable capital values with a softening bias in the last quarter of 2008, with the exception of Chennai which may see some further strengthening in key micro markets".
