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Real Estate Market Look at Bangalore

By: property, Tue Jun 13th, 2006 06:22:18 PM

The Bangalore real estate market has made some interesting stories recently. Poor farmers have been known to carry grocery bags of cash into the office of travel agents to purchase a family tour to London. It has been said that they know the value of land by the size of the bag of money they receive from the sale.

These stories may be exaggerated a little but it is true that real estate values around Bangalore have shot off the charts since 1991. Land on the outskirts of Bangalore that was selling for US $0.10 per square foot rose to $2.00 per sq. ft. Prices started to drop in 1995 and are now beginning to show gains again. Real estate investors and real estate developers in Bangalore have been on a wild ride. Of course, much of the rise in real estate values can be attributed to speculation but some of it has to do with solid market factors. First of all, prior to 1991, India was more or less a closed economy. It was next to impossible to find a Coke or Pepsi in India. Once the government changed the rules in 1991 the doors began to open. The market economy kicked in. Secondly, the global Non Resident Indian (NRI) population got involved in investing in India. Those global readers of this article who don’t know a wealthy Indian are an exception.

America has over 3 million NRIs, most of them are doctors, scientists, software engineers and other professionals. NRIs are in almost every country in the world; England, South Africa, Germany and especially the Gulf countries. On a tour of Kerala, India it is easy to spot the homes of those Indians who are working as professionals in Gulf countries. Their homes are large and often empty. Empty because the owner is still working in the Gulf. He has made his investment back in India by building a large house. Since he is often motivated by the need for security, owning land and a house back in his home country provides that security. These NRIs also find Bangalore to be a good place to invest in real estate. Any Indian anywhere in the world knows that Bangalore is a rapidly-growing city and one of the high tech centers in Indian. They know the reputation that Bangalore has for software development and other technology-related industries.

Finally, population pressure places a great demand on Bangalore real estate. Imagine India has a growing population of almost 1,000,000,000 people and only a finite amount of land. Thirty years ago, Bangalore was a city of only 300,000. Now Bangalore has about 5 million people. Villagers as well as professionals from other major cities have migrated to Bangalore seeking job opportunities as well as good living.

Bangalore really is a very nice place to live despite the growing pollution and overpopulation problems. It has a well-deserved reputation for its pleasant climate and beautiful gardens and trees. Perhaps this is the reason many Indian and foreign software companies locate in Bangalore. Yet it has so much more potential than is being realized.

Besides the physical beauty, the city has a well-educated population including many people who are both computer literate and English-speaking. In the future, these people should be able to have their skills compete on the global market and thus receive closer to a global wage. If only more progress could be made.

On one hand, it can be said that progress has been rapid since 1991 although on the other hand it appears that progress is slow. For example, the city of Bangalore in the year 2000 will still suffer from 4 hour per day blackouts. These power outages are not the result of a storm that knocked down a power line but because there is not enough electricity to go around. This condition is not new either. It has been going on for several years. One can only speculate that it is a combination of apathy, poor planning and unconcerned politicians. Then there is the problem of getting a telephone connection. A few years ago an Indian would put his name on a list and wait up to three years for a phone connection. Now things are better, the wait has dropped to one year and a rumor is circulating that it is being reduced to three months.

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Source: www.sulekha.com

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