24 February,2009 09:08 AM IST | | Lavanya Srinivasan
Bangaloreans have never had it so good with prices dropping by 40 per cent, and there's more good news
There's been a 10-40 per cent correction in real estate prices in Bangalore and some analysts believe that they could further drop 20-40 per cent by June.
Already, the signs are there for all to see. For instance, real estate behemoth DLF has re-launched its Bannerghatta Road project in Bangalore with a revised price tag of Rs 2,100 per sq ft from Rs 2,775 a sq ft.
A DLF spokesperson said, "We have launched our Bangalore project in four categories, where the base price ranges between Rs 1,800 and Rs 2,100 per sq ft."
DLF will compensate existing customers who paid a higher price by adjusting the outstanding amount against future payments.u00a0 It's not only DLF slashing prices. "Some Sobha properties are now selling at prices which are 22 per cent lower than what they were three months ago. A 1200 sq ft, two-bedroom flat in Sobha Sunscape now costs Rs. 38 lakh and includes a car park," said the Sobha Developer's spokesperson.
Analysts, however, said developers who had already launched their projects would find it hard to compete with DLF's prices. The real estate firm's price cuts are to the extent of 40 per cent, much more than what others are offering. This could hit competitors' sales as they are offering a minimum size of 1,445 sq ft with a base price of Rs 2,500 per sq ft.
Stamp duty benefits
The reduction in stamp duty on immovable property from 7.5 per cent to 6 per cent is just what the real estate industry was looking for. Here's what the industry is saying:
Ravi Ramu, director of Puravankara Projects: "We developers can now pass on the benefit of the cut in stamp duty to customers to stir up demand."
Zahed Mahmod, director of Silverline Realty: "This will help lower prices and revive interest among middle class buyers who have been waiting for prices to come down. Buyers can now expect a saving of Rs 45,000 on a house costing Rs 30 lakh."
Apart from the cut in stamp duty, interest rates on home loans are becoming more attractive. State Bank of India and Central Bank, for instance, have reduced rates to as low as 8 per cent.
