The demand slowdown in the residential market has resulted in a poor price performance over the last three years
Residential property prices will be considerably muted in the next five years compared to the previous five years, Knight Frank, the global property consultant has said.
The demand slowdown in the residential market has resulted in a poor price performance over the last three years, with most cities not even able to exceed even the inflation rate in the economy, Knight Frank said in second edition of its Residential Investment Advisory Report 2016, released on Wednesday. Real estate will no longer be a speculative investment and will have to compete with other investment avenues, such as equities, commercial office space and commodities among others, it said. “We strongly believe that any investment in real estate based on sound research can seldom go wrong, and there are ample opportunities to earn healthy returns even today,” Samantak Das, chief economist and national director, Research, Knight Frank said after releasing the report.
Knight Frank has developed a framework built on the ‘top-down approach’ in the selection of the six most promising cities and the zones within them, and the ‘bottom-up approach’ in the selection of the top investment destinations. This approach was modelled based on field visits to each of the residential markets and discussions with various stakeholders, he said.
Bengaluru’s residential market has remained resilient despite a slowdown in the country’s overall economic scenario. Knight Frank has identified three new locations, namely Thanisandra and Panathur-Varthur as top investment destinations in Bengaluru for the next five years (till 2020). The consultancy expects a price rise of 55% and 61% respectively.
“We have identified these three locations on the basis of their connectivity to employment hubs as well as enhanced social and physical infrastructure,” Satish B N, executive director—South, Knight Frank said.