Mid-Range Rentals Spike in Bangalore's Central Areas
Bangalore's rental prices for central mid-range properties experienced a significant increase during the second quarter of 2008. Properties in this category, which typically command rents between Rs 100,000 and 120,000 per month, saw a hike of 8-10% over two quarters. This development is attributed to the reduced number of fresh projects launched by major developers in the region.
Eastern and Southern Markets Witness Decline
Contrastingly, mid-range rental properties in eastern parts of the city, with rents between Rs 20,000 and 40,000, dropped by 11%, while the south and south-eastern regions faced a 4% decrease. According to the Q2 Bangalore Residential report by Cushman & Wakefield-India, the underlying causes of this dip are excess property supply, the emergence of new residential areas, and a particularly prominent interest shift towards north Bangalore. Areas like Whitefield, Sarjapur Road, the Outer Ring Road, and Bannerghatta Road are swamped with a plethora of existing and upcoming developments across different property grades, which is causing an oversupply leading to the dip.
Economic Factors and Market Unrest Lead to Stabilization
Despite a challenging environment characterized by a steep rise in inflation and a cash constricting scenario, rental prices across most parts of the city have remained stable, except for select high-end and mid-range projects that have seen increases since the start of the year, the report stated. The uncertain economic climate and tumultuous stock market have transformed the investment landscape in Bangalore's residential real estate field.
Forecast for Upcoming Quarter Indicates Status Quo
The ensuing quarter is not anticipated to stage any substantial modification in either capital or rental rates in the Bangalore residential sector. As a result of the current economic scenario and a shaky stock market, capital values are likely to remain unchanged across all areas. However, Whitefield, Sarjapur Road, Outer Ring Road, and Bannerghatta Road may see weakening capital values in the impending months.