Karnataka tier 2 3 realty real estate property UTVi developer housing Despite Bangalore’s real estate market showing signs of recovery, properties in tier-2 and tier-3 cities across Karnataka are still down in the dumps. Demand for both residential and commercial real estate in these cities is down by up to 35% as buyers are opting for cheaper options in Bangalore. Mumbai-based developer Sunil Mantri has been eyeing the tier-2 market in Karnataka but he says the recovery in these markets is not likely anytime soon. Says Sunil Mantri, Chairman, Sunil Mantri Realty: “The tier-1 city is very cheap and property prices are very competitive. Particularly in the IT segment. There would be an impact on tier 2 cities; because if Bangalore can offer Rs 20 rental people would be reluctant to go Mysore which can offer a rental of Rs 15. That is the competition we are facing in Tier 1 vs Tier 2 cities.” According to industry estimates, Mysore’s real estate market has seen demand drop by 25-35%, while Mangalore has seen demand drop by 25-35%. This trend is similar in other Tier-2 cities down south like Kochi and Coimbatore has seen demand dropped by 15-25%. Analysts say new projects in Tier-2 cities have been put on hold as there is already oversupply in these markets. Karun Varma, MD, JLLM – Bangalore: Correction can be anywhere between 10% and 40% and that’s what we’ve seen in tier 1 cities and that’s also happening in tier 2 cities especially on new projects which have been announced. Analysts say the recovery in the Tier-2 and Tier-3 markets will happen only after the Tier-1 market get back on the growth track. Developers are looking to push sales by cutting down prices in tier one cities and are looking to cash out of smaller markets to reduce risks.

Popularity: 1% [?]