JOIN USBangaloreans who enjoy a fairly good bank balance are going in, not for huge properties, but an additional property, especially in the apartments sector.
The idea to have an additional flat, these days, comes from the almost impossible task of securing a plot from the Bangalore Development Authority (BDA). People have waited more than a decade to secure their sites, but no hope is in sight, especially with the Arkavathy layout delay that has been on for years now.
Real estate observers say there is a second-apartment-purchasing-class that generates reasonable and profitable returns. In case a resident has a crore at his disposal, the trend now is to split the money between two projects.
People have been buying apartments in prime areas like Jayanagar, BTM, J P Nagar, Sarjapur and Whitefield. The apartment in which they reside could be say in Jayanagar, while the other one would be in an area growing faster than Jayanagar or potentially the one which shows high growth rates.
People working in South Bangalore could go in for a flat in East Bangalore, anticipating that IT companies would double in the micro-markets there.
“A person may buy two flats - one in Jayanagar and another in Whitefield. The first one is where he resides, while the second one, apart from helping generate rental income, would be useful in case the person heads to Whitefield for work at a later time either in the same job or in the course of working for a new company,” says Srinivas Reddy, a real estate analyst in the city.
There are people who live in Jayanagar but work in Electronic City owing to the high concentration of IT companies there. A 46-year-old IT engineer, who did not want to be named, explained, “For security purpose, I have bought another flat in Banashankari (BSK), and rented it out, though I stay in Jayanagar. In case I happen to work in the global tech village in the Mysore road area, then the BSK apartment would come in handy. At present, I work at Electronic City, which can be approached via Silk Board and then Hosur main road from Jayanagar.”
Most people buying two apartments belong to the dual-income class. Both
husband and wife could be working in different IT companies and carrying home around a lakh and a half or two lakh or more together. Typically these buyers are people with income above Rs 60,000 each.
“The city’s IT/ITES/BPO sector employs nearly nine lakh people, with about five to six lakh in IT. The emergence of the IT sector has emboldened the younger generation to go in for loans and purchases,” says Srinivas.
The developers are concentrating on one significant belt for property construction in the city - the one that runs from Hebbal in the North to Sarjapur in the South via Whitefield and Marathalli. This is where the purchasing class is very high in number. Typically they would source home loans, too, which offsets requirements of income tax.
A monthly EMI of Rs 50,000 is not beyond their budget, and in case, they get to go abroad on work for a period of six to twelve months, the money saved abroad would be invested in Bangalore to secure themselves a permanent residence and piece of land in the IT city, which is somewhat of a dream of every generation here.
While dual apartment buyers maybe on the rise. people within the income range of Rs 40,000 to Rs 80,000 is huge, and volumes sold are the most in this category, says Suresh Hari, secretary of the Confederation of Real Estate Developers of India (Credai), Bangalore. Premium builders are, however, confident that they will generate high returns on their investments, because this class of people also brings in the dollars.
An assessment of IT growth trends every quarter is undertaken by builders to understand demand trends for housing in that quarter and the next.
The growth of IT has created confidence also among those earning less than Rs 40,000 per month to go in for apartments that maybe more interior compared to the residences that higher income groups can afford. Interior or extension areas of Vijayanagar like Nagarbhavi, Ullal, Malleswaram, Seshadripuram, or JP Nagar going all the way to the ninth phase, Sahakarnagar, R T Nagar and Dollar Colony are some of the areas where the professionals, whose salary is below Rs 40,000 per month, look for homes.
As a matter of fact, there are quite a few professionals working in Electronic City and Whitefield, while residing in a good distance away at Vijayanagar and beyond. Says Latha L, a technical team member who works for a company close to Electronic City, “I catch my bus at 5.30 am to get to office and take the 3.30 pm bus back home. People ask whether travelling the distance is worth it, but I see the training that I get as a golden opportunity to build my career.”
Aspiration is certainly in even if it means a bit of perspiration. Times have changed.