Residential sale prices have increased by approximately10-20% from the trough. While the current sales volumes are extremely weak, we expect a gradual increase in the volumes with improving confidence in the IT/ITES sector and improvement in hiring.Weak Volumes
We were surprised by the persistent weakness in sales volume based on our discussions with property brokers. According to the brokers if peak sales were 100 units/month, then the worst period was December 2008-January 2009 with zero unit sales, the current sales being approximately 10-20units/month.If all the planned launches are achieved as per the developers' objective, we could, in that case, expect pressure on the prices.
HDFC Mutual Fund is betting big on B'lore based realty companies - Sobha, Brigade and Purvankara Projects. However, we are not sure if it is a bet on Residential projects or big deal like that of Brigade Enterprises Northstar Malleswaram Tower being sold to Oracle.
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