Real Estate in Bangalore: The Demand and Supply Breach

The real estate is considered to be the second largest employer in the Indian economy after the agricultural sector. The real estate company comprises of mainly four major categories namely housing, commercial retail and hospitality. The housing sector donates the major percentage to the country’s GDP. The market therefore looks positive due to the upcoming demand across all sectors in the city. The inflation and interest levels are some of the factors along with the increased property price which are accountable to caste an affect in the realty industry.

With the upraising demand the real estate prices will also receive a push. In a comparison chart of seven cities Bangalore will witness the highest demand and supply gap. There is also a noticeable rise in the demand for commercial spaces in metropolitan cities like Bangalore. It is also expected that both the segments of High and Middle Income Group will witness the demand and supply gap in between the years of 2013 to 2017. The one major reason for this demand and supply gap is that the population is increasing at a faster rate than the apartments being constructed under the residential segment.

Due to the delay in the formulation and Land Acquisition Bill and the Real Estate Regulatory Bill the demand and supply of residential apartments will still be delayed. The uncertain scenario thus, affecting the supply of residential units. The upward movement of the prices is due to the shortage of housing of around three fourth among the top 10 states.

Many of the developers have a number of inventories unsold due to over pricing. The major factor which can decrease the stress is by reducing the pile-up which will eventually result in liquidity.

The unavailability of land in the urban areas has led the real estate developers to face a lot of limitations. Many other problems accounting to this are delayed sanctions from authorities, financial constraints, rise of construction cost and labor and manpower shortage. Proper planning, capitalized construction cost, better funding from developers, proper availability of housing loans to the weaker sections are some of the corrective measures which will help in overcoming the above discussed problems.

Thus, if the above factors are given appropriate contemplation then this huge gap between the demand and supply will be abridged.