http://www.moneycontrol.com/india/news/business/bangalore-real-estate-mkt-bubble-bursts/21/23/317459

The bubble in Bangalore's real estate market has begun to burst. Prices of homes have dropped by nearly 20% in six months, reports CNBC-TV18’s Faye D'Souza.

Buying a home in Bangalore just got a lot easier on your bank account. According to a report released by Asipac, a real estate consultancy firm, prices of homes in Whitefield and Marathahalli have dropped by 12%, while homes in Sarjajapur RD have seen a sharper drop of 20%. Homes in Jayanagar and JP Nagar are cheaper by nearly 15%. The report attributes this to the end of the speculation in the city's residential market.

“Multiple purchases are almost nil. Earlier people would buy 4,6 or 8 apartments. That has gone down to a great extent. It is becoming much more a user-driven market than a speculators market,” said Amit Bagaria, Chariman and CEO, Asipac Projects.

A lot of the blame is being pinned on Bangalore's collapsing infrastructure. No water, no electricity and bad roads has resulted in a dip in buyer interest in the city's upcoming suburbs.

According to Asipac, the only areas that have not seen a dip in rates are those around the new airport. But the volumes of sales in these areas have dropped by 10-40%. Banglaore's organized developers have sold only 26,000 homes in the city so far this year, compared to the 33,500 homes they sold last year. Anxiety about the political situation and the job market in Bangalore could be the reason.

“Even if there are people who can afford to buy at today's prices, they are holding back, because of the political situation. They do not know what the future of the city will be. With a lot of companies moving out to Hyderabad, Chennai and Mysore, they do not know if they will have a job in the city,” added Amit Bagaria.

Some experts say investments in projects, supported by strong infrastructure, could still be a good bet.

LOL. Who r these "experts"? I dont get it.

Anyways, as I am closely following the real estate market in Blore and Chennai, I can say that not all the reports are true. Prices in the outskirts of Blore may have come down due to glut of apts as speculators from outside had jacked up the prices. Inside the city, things are same, high cost. Organized builders deliberately try to mislead the janata saying that the prices are coming down and when u go to buy, its still the higher rate. Also missing is the used apt/house sales that are never accoutned as there is no system to track them. Now most of the outskirts of Blore are coming under the Blore city corporation, things will look rosy in RE market. If things were so bad, why still big IT firms such as Cisco, IBM, are still in Blore. They could have moved to Chennai.

DIO