BANGALORE: Realty analysts have left many investors worried as they have noted a 4.5 percent increase in property prices on the outskirts of the city in the last four months.Town planning experts noted that the trend is true across the globe. Property prices rise first on the outskirts and then the same is reflected on the Central Business District (CBD) areas.“Our research shows that Bangalore real estate prices have risen by an average of 4.5 percent in the last four months. This is based on the price change observed for 85 projects from December 2011- April 2012. The survey shows that in 41 percent of projects, the prices remained stable and in another 40 percent of the projects prices rose by more than 5 percent. Prices were stable in areas like Yelahanka and Electronics City and there are certain areas like Sarjapur Road, Bannerghatta Road and Kanakpura Road where prices increased by more than 5 percent,” explained Sandeep Reddy, co-founder of a Real Estate group buying portal, Groffr.com. Further, experts explained that the main reason that development and price rise begins on the outskirts first is because of vast availability of land.“In the CBD, already marked by the municipality, it is difficult to find area for development. Further, the appreciation on the outskirts is higher, the base price is lower. Another interesting thing is that while construction costs are almost the same across the city, within the CBD there are a few restrictions. For example, a project that would take 12-14 months to complete construction on the outskirts, will take about 18-24 months within the CBD because of restrictions,” said Shrinivas Rao, CEO-Asia Pacific, Vestian Global.According to study of the residential market in the city,conducted by Vestian, the industry has witnessed an annual growth of 15 percent on an average year on year.They also explained that while there is a huge demand for residential spaces on the outskirts, as the IT hub is settled there, there is enough supply too.
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