Urban Real Estate Trends: A Look At India’s Fastest Growing Metros
A lot has happened over the last 22 months since the dawn of new year in 2014. A new government led by the NDA stormed into power replacing the Congress as an anti-incumbency wave of gargantuan proportions swept the entire nation. The business state of things are on the rise with the government taking calculated steps towards delivering the massive reforms that were a part of their pre-election agenda. Now that the government has settled in, let’s see how the prospects have changed over the course of the year.
In 2014, the Indian economy was nursing the then indelible marks of a below par growth rate and the realty market was also severely hit due to this. Delhi real estate experienced something similar with residential properties in particular witnessed below-par performances as the rates fell by 20-30%, owing to an apparent lack of demand in the market. Builder inventories began piling up despite countless offers, discounts, and new projects. However, commercial real estate showed considerable development as IT/ITes sector thrived in business regions like Gurgaon and Noida.
Fast forward to 2015, the situation still more or less remains the same but the sentiments of the stakeholders, in this case the builders, are improving. This can be credited to the business-friendly approach taken by the government. While there aren’t any huge numbers to be expected yet, the latest move by RBI to cut interest rates could certainly contribute to a positive development for properties in Delhi.
The situation of Mumbai’s real estate was just the same as it was in the rest of India as prospective homebuyers kept away from a home purchase hoping for an upturn in the market’s fortunes. There were several complaints from realtors that their inventories were at a very high number and although, there were enough enquirers from consumers, not many of them actually materialised into sales. While the number of new projects dipped by 22%, so did the absorption rate, which shrunk down by 28%. However, the peripheral suburb areas including Navi Mumbai and other location on the eastern and the western front grew in popularity as they offered more affordable options for the middle-class populace.
This year the suburbs and other regions on the outskirts of Mumbai have been gathering steam as they seem to have taken the cue from previous year’s developments. Localities like Vasai Virar, Mira Road, Kalyan, and Ghatkopar among a few other areas have been the prime favourites for new investors as they offer the best in both prices and infrastructure. You can check out Commonfloor to discover a host of great properties in the aforementioned localities.
The south Indian city of Bengaluru was among one of the few cities to not have been severely crippled by the ill-fates of the real estate sector. While absorption rate plummeted 37% in some cities, the number in Bengaluru were less than 20%. Thanks to the well-established IT industry, the city has still maintained a slow yet steady growth. Over the last year, areas in and around the Outer Ring Road, Sarjapur Road, North Bengaluru, and Whitefield have been in demand due to their proximity to several SEZs and other business parks.
The price trends in the city are as follows at present: below INR 50 lakh for affordable segment properties, INR 75 lakh-1.5 crore for mid-range, and INR 1.5 crore and above for luxury segment condominiums and villas.
Although, the entire real estate scenario in India, as far as the fast growing metros are concerned, is still bleak, rapid reforms like the interest rate cuts and also the introduction of REITs among other key moves taken by the government has given the fledgling realty sector a new hope of better days to come. Currently, both builders and homebuyers are looking for appropriate reinforcements on either side to fuel their respective aspirations.