Bangalore, the country's information technology capital, is expected to maintain its lead in the growth of home sales this year, too, mainly driven by affordable prices and healthy offtake.
Despite a 17 per cent rise year-on-year in home prices in the financial year 2013 (the highest increase among the top cities in the country), the city saw a 19 per cent rise in home absorption during the last financial year, which was also the highest among other cities, data collated by realty research firm, PropEquity, showed.
The Mumbai Metropolitan Region (MMR), which consists of Mumbai, Thane and Navi Mumbai, saw a decline of 22 per cent in absorption of homes and the National Capital Region (NCR), which consists of Noida, Gurgaon, Greater Noida, Faridabad and Ghaziabad, saw a marginal rise of two per cent in FY 2013, the data showed.
However, prices in NCR have risen 16 per cent while those in MMR have gone up by 15 per cent. Average home prices have crossed Rs 12,000 a square ft in Mumbai.
Average weighted prices of homes in the Karnataka capital have risen from Rs 3,307 in FY 2012 to Rs 3,866 in FY 2013. Both, developers and consultants, say healthy demand from end-users will continue to fuel home sales in Bangalore.
"We believe prices are reasonable. Despite the tough macroeconomic environment, demand from actual users is still coming in. We will do better this year than the previous one," said J C Sharma, vice-chairman and managing director at Bangalore-based Sobha Developers.
Sobha expects to sell 4.20 million sq ft of new space in the current financial year as compared to the 3.76 sq ft space it sold in the last financial year.
Bangalore companies such as Puravankara, Prestige, Brigade, and Sobha saw growth of 52 per cent, 88 per cent, 18 per cent and 29 per cent, respectively, in their net sales in FY 2013, which were the highest among top listed companies in the country.
Added Ram Chandani, head of southern region and deputy MD for south India in CBRE, a global property consultant: "Though sales have gone down marginally in the last one month, we expect sales to remain stable and steady."
"Though percentage growth looks high, base prices are low," Chandani said.
Between 2008 and 2010, during the global economic slowdown, property prices had remained stagnant in Bangalore.
"Over the last 24 months, there was a steady increase in price, but it is not substantial. We believe prices will not go up this year but remain steady," Chandani said.
Added A K Prabhakar, senior vice president, equity research, at Anand Rathi Financial Services: "Compared to any other city in the country, we expect Bangalore to maintain momentum in sales due to growth in IT and manufacturing."