Bangalore had seen tremendous upward trend during the last 50 years as far as real estate business is concerned. The market is seen as an excellent portfolio for investment by the investor. Tremendous inflow of funds has been seen in Bangalore real estate market, both from the domestic and NRI investors.

 

However, during the last two years, the growth in terms of number of units sold has seen drastic downward trend, due to various extraneous factors, such as, recessionary trends in the other sectors, such as, software / hardware, bio-technology, manufacturing, auto industry, etc. Drastic manpower reduction was resorted to by several reputed companies which resulted in not only slow off take of housing credit but also severe problems in repayments. Hence, banks slowed down their credit outflow to this sector resulting in further detriment to the housing sector.

 

To improve the situation and augment the growth in this sector, the Government of India took several steps to boost the sector by directing Reserve Bank of India to implement several schemes and ease existing norms of lending to this sector. Accordingly, rates of interest on fresh housing loans have been drastically reduced. Builders have been funded with margin capital, working capital finance, term loans, etc. for on-going projects and new housing and other peripheral sectors. Housing development institutions have been encouraged to bring about new schemes as also build low-cost houses.

 

Several State Governments have reduced the cost of registration and other duties, so that more and more registrations happen with relatively less taxes to be paid. The glut which was seen in this sector cleared due to the above drastic measures taken by the Government. Presently, we see that more and more builders / real estate developers are slowly moving back into the market with new housing projects with attractive investment options.  Investors are also looking at this sector once again with keen interest.

 

Government has given priority to this industry so that it starts generating employment opportunities as also provide economical housing units to the common man. The general scenario should change drastically in the months to come in the current fiscal.

 

Since the market has seen a downward trend during last few quarters, Nava Nakshatra Homes strongly recommends the investor to take advantage of the lower rates of plots and lower interest rates on housing loans and invest in a site project immediately. If neglected, we presume, the prices should sky-rocket again in the next few quarters. In Fact, the prices have already started sky-rocketing.