Bangalore is set to see 1.4 lakh new residential apartment units entering the market in 3 to 4 years and the city will see price stabilisation in 2007 as against a steep rise in prices in 2006.

During 2005-06 there was a huge mis-match between demand and supply, and this led to a sudden rise in the property prices.

But, in 2007 there is enough demand to take care of the supply and the year is witnessing price stabilisation, said Balakrishna Hegde, president, Karnataka Ownership Apartments Promoters Association (KOAPA), while announcing the two-day real estate expo `Reality 2007'.

"The real estate sector has grown at 30 per cent for the last two years and continues to grow at the same pace in the present year. About 1.4 lakh units are under the various stages of construction and is to hit the market in 3-4 years. In 2007 alone, about 30,000 units are to enter the market," he added.

Thirty five property developers are taking part in Reality 2007, showcasing 18,000 units covering 150 projects. LIC Housing, ICICI Bank and HSBC are the sponsors.

Most of the property development is happening in the suburbs of southern and eastern part of the city.

"The suburbs will cater to the existing demand for commercial and residential space. The rising economy, growing job opportunities and appreciation in salaries has boosted affordability among different income groups in Bangalore," said Hegde.

Talking on the increase in guidance value in Karnataka's urban areas and its impact on residential property prices, Hegde said, "The increased guidance value will severely hit the industry, which is already burdened with taxes. The industry now pays a number of taxes including service tax, licence fee, value added tax and others that amount to around 38 per cent of the cost."