While cities such as Mumbai and New Delhi are seeing the property-buyers ‘clamming up', a healthy supply of housing from builders and realistic prices are propping up the property market in the South. Demand for housing in Bangalore remains buoyant, say bankers and real estate industry analysts.

“There are a lot of new projects in the city now, and there is a steady business going on as far the home loan segment is concerned,” Ms Shubhalakshmi Panse, Executive Director, Vijaya Bank, told Business Line. According to her, there is neither a spurt in home loan takers nor any noticeable decline.

Mr Ramnath Pradeep, Chairman and Managing Director of Corporation Bank, said there is no slowdown in the housing loan segment.

“On the contrary, this year also our focus will be on the retail side. There is absolutely no issue at all,” he said. Agreeing, Mr P. Jayarama Bhat, Managing Director and Chief Executive Officer of Karnataka Bank Ltd, said that his bank has not witnessed any slowdown in this segment. “We expect the housing loan segment to continue in the same pace,” he said.

Off-take stable

Similarly, Indian Bank too has seen a stable home loan off-take in Bangalore. Its home loan off-take stood at Rs 110 crore in 2009-10 for Karnataka, while the bank could close this fiscal with similar figures or a very marginal growth, said an Indian Bank official.

Mr M. Narendra, Chairman and Managing Director of Indian Overseas Bank, said that there was good improvement in residential mortgage demand.

“Just a month ago, we conducted housing exhibition in Chennai. Nearly Rs 30 crore was sanctioned in that and nearly 800 references were there,” he said.

But given the changing conditions, the earlier regime of low interest rate and teaser rates may not be possible, he added.

Real estate industry analysts point out that with job confidence back in the IT sector, the real estate market in Bangalore is indeed doing well.

“Though the recession dealt a psychological blow to the real estate consumers, which resulted in sales coming to a standstill, the market is reviving in Bangalore. It is a user-driven market,” said Mr Neville M. Vaswani, Managing Director, Vaswani Group.

He added that property prices haven't shot up like they did in Mumbai and Delhi, and it has been a gradual rise in the past one year.

“While prices went up by even 50 per cent in these cities, in Bangalore prices have gone up by about 10-15 per cent,” explained Mr Vaswani.

Because of the unrealistic price-hike, property buyers are shying away from the market in Mumbai and Delhi, and it is for the same reason, developers have not hiked their prices unrealistically in Bangalore, he reasoned.

Related Topics
comment COMMENT NOW