There has been speculation over the performance of real estate market, post the economic slowdown. P Ravindra Pai, MD of Century Real Estate, clears the air regarding the same in Bangalore. While discussing with Shradha Goyal, MagicBricks.com Bureau, he says that the buyer is sensitive towards affordability and the right ticket size has not suffered due to the slowdown. Excerpts from his interview:
How is the real estate buyer reacting to the current economic slowdown?
There is not much impact on the sales of residential properties in the city. The only visible impact of the economic slowdown is that the buyer has become highly sensitive to the overall ticket size. With interest rates going up and loan eligibility coming down, the focus has shifted from per sq ft value to affordability.
How have the sales been in the last three months?
The ticket size of Rs. 50-80 lakh is selling well. However, there has been some resistance in the ticket size of Rs. 1 crore and above. Sales of properties valuing Rs. 1 crore and above have dropped drastically in the last one year. Developers who had come up with premium homes in 2012 are suffering from the economic slowdown. Many other new launches are expected to happen in the correct ticket size that is, Rs. 50-80 lakh.
Looking at the scenario, do you think it is the right time for a buyer to enter the market in Bangalore?
Bangalore is a neutral market. It is not very expensive. The prices have not dropped and are not even expected to decrease. It is definitely a good time to invest in the city as values will only go up with time. Also, since the interest rates of home loans are expected to go down, the buyers will have an increased capacity to buy. They can definitely look forward to a beneficial investment.
Is NRI investment impacted with the fall in rupee value?
There has been a lot of talk over the NRI investments going up due to depreciation of the rupee value. However, it is noticed that though the enquiries have gone up, they haven’t been translating into actual sales. The NRIs are waiting and watching as the market is volatile. As the rupee stabilizes, we might see some sales happening.
In such a scenario, which locations are good for investment?
Only two corridors have been the investor’s favorite. One is the Sarjapur-Outer Ring Road stretch which is popular for IT companies and work spaces. The second one is North Bangalore for healthy ROI as it is close to the airport.