Friday, 23 August 2013

Price no bar for premium apartments in Koramangala


 
South Bangalore is the way forward of taking the city to the world or at least in terms of premium living. Being crowded by the well travelled expat population, Koramangala has seen unprecedented rise in the premium living properties. Inevitably, with the escalation of demand in the segment, prices of such properties according to industry experts have doubled in the last two years.

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Looking at the demand, many builders too are coming up with options for the HIG and HNI clients when it comes to luxurious living. On the other hand the projects that are already there are cashing in on the demand in the secondary market.
"In Q1 2013, the luxury residential market witnessed ample supply. More than 520 projects have been supplied in last one year in the category. These projects show a healthy absorption of around 60 percent," said Sumit Jain, co-founder and CEO, CommonFloor.com.
According to Q1 2013 Residential Real Estate Market Report Bangalore, by LJ Hooker, there has been a general oversupply of high-end inventory. In luxury and super luxury segments there is a potential oversupply of stock being put into the market. The report maps 470 residential projects in categories of apartments, villas, row houses, villaments, and plots.
These projects show a supply of approximately 1.3 lakh units across the city and its suburbs with 42 percent of unsold inventory as of end Q4, 2012. The average area of an apartment in the Bangalore market is quite large by national standards at 1,753 square feet, while that of row houses and villas were 2,831 and 3,545 square feet respectively.
"In last one year we have seen a lot of new entrants in lifestyle oriented high rises in the city including Rajajinagar, Maleshwaram, Ulsoor, Indiranagar and especially Koramangala, that over the years has become a hub. Well travelled population in Koramangala are now looking for all those features in their homes too," added Jain.
The under construction projects in the segment include Chourasia Signature and Indus Oasis priced at Rs 1.63crore and Rs 2.63crore. The existing ones that completed within 2 years are Sipani Grand, Raheja Vivera, Prestige St Johns Wood and Embassy Pristine. Their prices vary from Rs 1.4crore to Rs 3.49crore.
With shortage of space being an ever existing problem in the South Bangalore hub, demand exceeds supply in at Koramanagala. However there has been a 30 percent increase in new launches in the premium segment with high sales velocity. According to Jain, clients are not shying away to invest in properties that start at as high as Rs 9000 per square feet. These prices for the luxury residential nevertheless are lesser than what the present rates are at other metropolitans like Mumbai.
"Presence of old Bangalore charm, boulevard line ups, social infrastructure and a heterogeneous metropolitan crowd makes the place a niche neighbourhood. The value for money hence, being huge in these segments. In last two fiscals, the capital values of these projects have also gone up by 100 percent," added Jain.
According to data available with Cushman & Wakefield, average capital value as on Q2 of 2013 has been between Rs 6,000 to Rs 10,000 per sq ft whereas houses in premium segment have prices 10 -15 percent higher even if similar size.
"Premium projects could be ground level or top level penthouses with extended wooded decks, or be a villa or a simple spacious apartment with facilities like swimming pool, a thermal pool, private elevators, three sides open structure, multi-gym, community halls, state of the art security system, joggers track and various other features," said Kalpana Murthy, associate director, residential services, India, Cushman & Wakefield.
She also mentions that while buying a project that has an extended terrace or balcony and been played up with, one must take into consideration the legality of the construction. "Calculation of super built-up area is also an important factor buyers should look at while zeroing on a certain project because of the maintenance to be paid later. Cost of space could be anything like 50 percent of per square feet cost or 1/4 th or anything else and is the discretion of developer," adds Murthy.
The housing projects with penthouse and luxury apartments also try to accommodate a mini super market, spa, golf course view, lake view and creche facilities inside the compound itself. Though demand has been softening in the city according to builders due to the recent slowdown, Koramangala has remained unaffected by any adversities.
NRI investments too have gone up and the secondary market in the segment has also seen an upward trend with old houses being refurbished into luxury apartments where property owners have enjoyed a 15-18 percent ROI.

Source - Economic Times