Bangalore’s residential rentals in central locations for mid-range properties for second quarter of 2008 have recorded peak values. Mid-range developments are properties quoting rentals between Rs 100,000- 120,000 monthly.
The values have gone up by 8-10% in two quarters and the main reason credited for this sharp movement is lack of fresh projects launched by leading developers.
Rentals of mid-range properties (Rs 20,000-40,000) located in eastern and south and south-eastern parts of the city have fallen by 11% and 4% correspondingly.
The excess supply of all grades of developments, appearance of newer residential locations and unexpected shift in interest towards north Bangalore have impacted the eastern and southern markets to a huge extent, said Cushman Wakefield-India’s Q2 Bangalore-residential report. Also Whitefield, Sarjapur Road, Outer Ring Road and Bannerghatta Road have an abundance of existing and future residential developments of a range of grades, leading to excess supply.
“However, the mounting rate of inflation and the existing cash crunch has led to stabilization in rentals across most areas, barring a few projects in both high-end and mid-range sectors since the first quarter,” the report added.
The coming quarter is not likely to witness any big changes in either capital or rental values in Bangalore’s residential sector. The current economic condition and the unstable stock market situation have changed the outlook for investment preferences in this sector.
Capital values are expected to continue stagnant across all areas in the future months, but are probable to weaken in Whitefield, Sarjapur Road, Outer Ring Road and Bannerghatta Road.