Builders
attribute this to reduction of interest rates on housing loans
 |
There
are more than 80 apartment complexes under various stages of completion in
Mysuru city.— PHOTO: M.A. Sriram
|
The residential property market in
Mysuru city is showing signs of an upswing although the demand for commercial
property remains muted.
The relative upswing in residential
units comes after years of stagnation and builders attribute the positive
sentiment to reduction of interest rates on housing loans. Besides, a general
rise in wages across various sectors has contributed to the positive sentiment,
according to N. Subramanya, chairman, Builders’ Association of India (BAI),
Mysuru chapter.
He told The Hindu that both the builders and plot
developers vouch for the positive sentiment in the market and since the
property rates have been stagnating for sometime, they aver this is the best
time for end-users to invest.
There are more than 80 apartment
complexes under various stages of completion in the city and the majority of
the buyers are salaried class with roots in Mysuru or Bengaluru, said A.R.
Ravindra Bhat, former chairman, BAI, Karnataka chapter.
The spurt in demand for housing is
fuelled by end-users while investors with a long-time horizon are looking at
vacant sites, he added.
Stagnating commercial
property market
However, Mysuru as a Tier 2 city with
potential to draw FDI in real estate is bleak for now as various studies have
indicated that the focus of investors will be on major metros which continue to
be the economic drivers.
Lack of job opportunities, poor growth
of the IT sector in Mysuru and a sluggish industrial development have put the
brakes on the growth in the commercial property market in the city for now.
The rate of returns does not match the
investment and hence developers in Mysuru are not opting for commercial
property development.
Some of the major retailers, with a
chain of malls across the country, have sold their franchise in Mysuru or have
shut shop underling the prevailing downswing in the commercial property sector.
“For an investment of Rs.1 crore a
rental of at least Rs.60,000 is essential to break even … but the prevailing
rentals is lower than Rs.40,000,” Mr. Bhat said.
But improvement in connectivity with
the completion of the double line track and expansion of the four lane road to
six lane between Mysuru and Bengaluru may turn the market around in the long
run.
The stakeholders are also hopeful that
the ongoing development of new industrial estates around Mysuru and the
benefits of reduced cost of operations may spur industrial investment in the
long run to fuel commercial property development.
Credit : http://www.thehindu.com/
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