The Hindu Business Line : Real estate expo on April 28-29

Bangalore April 25 For a buoyant economy, a booming real estate sector is vital. Any attempts to choke the sector would hamper the growth, said Mr Balakrishna Hegde, President, Karnataka Ownership Apartments Promoters Association (KOAPA), at a press conference to announce the association's real estate expo, Reality 2007, here on Wednesday.

He added that the Government should recognise the sector as the engine of the country's economic growth.

The bi-annual event, to be held on April 28 and 29, would have over 30 developers showcasing 18,000 residential units. It would bring developers, housing finance institutions and end-users under one roof. LIC Housing Finance Ltd is the main sponsor for the event, while ICICI Bank and HSBC are co-sponsors.

Demand high

Mr Hegde described 2005 and 2006 as years of exponential growth, and 2007 he said will be year of as the one of stabilisation. Though "recent onslaughts on the real estate industry" have caused a slowdown, the demand continues to be more than the supply, he said.

He felt that the current revision in guideline values by the Karnataka Government would severely hit the industry which is already burdened with taxes and duties. The guideline price is fixed by the Government depending on the localities in the city. The prices have been increasing steeply.

There are 1.4 lakh residential units in various stages of development in Bangalore now, which will be completed in the next 3-4 years. The supply for 2007 would be around 30,000, he said.

Mid-segment properties

According to the trend that emerged during Association's previous expo in December 2006, there is still a demand for mid-segment (Rs 30-45 lakh) properties at 35-40 per cent. About 25-30 per cent of the demand was for the budget segment (Rs 15-20 lakh), mostly from first-time buyers.

Mr Hegde hoped that the relief brought in by the recent credit policy to those opting for home loans less than Rs 20 lakh would only be the beginning of "relaxations" that the Reserve Bank of India would come up with. This would push the demand towards the budget segment, he added.

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