Property prices are likely to see a 20 per cent spurt over the next one year on the back of the rising input prices along with higher wages being paid to workers.
However, such a price rise will not dampen the demand as most of the demand is coming from end users rather than speculators in the market.
"We expect a 20 per cent rise in the property prices in the next one year. Demand, which has grown around 30 per cent over the same period last year, will not be affected due to such a price rise," Sushil Mantri, president of Confederation of Real Estate and Developers' Association of India (CREDAI), said.
CREDAI-Karnataka, which will hold the Realty Expo 2010 in the city during 9-10, expects the growth momentum to continue due to the higher economic activity.
Realty Expo, an annual event organised by CREDAI in the city, will showcase 108 projects of 52 developers and around 15,000 units will be available for sale, Mantri said.
Referring to inventory levels in residential space, he said, "Inventory levels in the residential space is very low as of now and had been absorbed in recent times. Rather, there is a probability of an addition of around 5,000-6,000 units in coming months in Bangalore market."
Home loan rates are competitive despite the hike in policy rates and customers are buying homes due to such low interest rate regime, he added.
He, however, said that the rising cement prices remained a matter of concern for the whole industry.
"Cement prices have shot up around 40 per cent during last one month due to a cartel formation by cement companies. So, margins of realtors are constantly under pressure due to such price rise," Mantri said.
Referring to the demand and commercial space, he said there was demand for large spaces of commercial property by IT companies in the city.
"With the revival in IT market, companies are again looking for commercial properties in the city," he said.
Retail is looking up and there are higher inquiries from retailers for space, he added.
However, companies may not see higher profitability as compared to last quarter as most of the projects are in under-construction phase.
"Profitability of companies will not see significant improvements as most projects are in the construction phase," Mantri said.
The higher sales volume being seen now will reflect on our balance sheet from the next financial year, he added.
