In the first quarter of the current fiscal, 15.58 million sq ft of residential space was sold in the city, giving it a total market share of 13.9% and beating other domestic markets in homes sales, property research firm PropEquity said.
In comparison, property sales in the bigger markets of Mumbai Metropolitan Region and National Capital region fell by 60% and 57%, at 15.98 mn sq ft and 28.86 mn sq ft respectively. The trend continued into the second quarter.
"Bangalore is witnessing higher offtake as compared to other bigger realty markets in the country despite challenging times," said Pirojsha Godrej, managing director and chief executive officer of Godrej Properties BSE 1.27 % , which is in the process of launching projects totalling 4 mn sq ft over the next few months.
Experts say Bangalore's real estate market is growing due to a combination of factors such as a greater percentage of end users among buyers than in the other cities and a relatively moderate rice escalation.
"Land is not priced out in the south as compared to other cities. The property market in the city has performed even during the slowdown," said Prashanth Sambargi, partner at Mars Realty. The company is looking at mid-sized residential sector and standalone retail for luxury projects as its revenue drivers this fiscal.
In 2011-12, the southern cities including Bangalore contributed nearly 40% to the country's home loan disbursals of Rs 1.95 lakh crore. Since April, LIC Housing Finance BSE 0.76 % garnered around 14.5% of the total home loan business from the Bangalore region, compared with 12% in the corresponding period last year.
"Bangalore property market is leading both in terms of loan disbursement and sanction. There is a turnaround in the real estate market in Bangalore, which is mainly due to slower growth as compared to markets like Mumbai, Delhi and Chennai," said VK Sharma, CEO of LIC Housing Finance.
Delhi-NCR and Mumbai witnessed a sharp drop of over 40% in property sales in 2012, compared with the previous year, mainly due to multiple increases in home loan rates and inflated property prices. The southern cities, including Bangalore, did not see such a sharp downturn partly due to the turnaround in the IT sector.
