Top 3 Real Estate Hotspots of India in the year 2015

The inception of new central government in the year 2014 had brought the country’s development on a roll. The Abki baar Modi Sarkar<link> campaign created a much-needed push for every sector of the economy. While India is ready to become the manufacturing hub on one side, the concept of smart city has found its place in everyday conversation, on the other.

One zone that has been showing maximum development signs is Real Estate.

The #RealEstate industry of the country has shown signs of stable growth; in terms of capital appreciation, new launches, and infrastructure developments. In the competition for becoming a renowned smart city, a majority of states are coming up with new projects, renovating infrastructure, etc.

All of these have transformed the sentiments of both developers and end buyers largely.

Year 2015 is expected to elevate the demand and supply further. The factors to support this growth are:

• The risk of inflation has submerged, and the borrowing rates are expected to be lower than the present levels.

This will support potential buyers wanting to take advantage of home loans in order to make the deal. In addition, due to the stability of property prices plus good offers by developers for clearing inventory, apprehensive buyers are becoming optimistic to purchase their dream house.

• The economic activities are slowly rising.

Central Bank has forecast the GDP growth to be 6.5% in financial year 2015-16. The Corporate India has also announced that they will hire more talent to assist in tackling growing business activity. When we add it together, it means an increase in jobs and thus incomes. This in turn is going to be extremely favourable for all commercial and residential real estate markets, irrespective of the zone.

• The real estate segment has seen a re-orientation.

This has made developers largely focus on affordable homes largely. This is expected to go a long way in covering the present wide distance between supply and demand of the affordable homes.

While almost every region of the country has shown signs of development, three cities have emerged as the most promising ones for investment purposes. Let us look into them in some detail.

1. Mumbai

The Financial capital of the country, Mumbai has shown a strong growth by attaining the 11^th position in the year 2015, which was earlier 20^th & 23^rd in 2013 & 2014 respectively. The reasons behind the increasing popularity of Mumbai are:

• Greater income demographics
• Higher investment activity level
• Equal growth in development among all sub markets of the city

For end users looking to buy a house in Mumbai, the average increase in the last quarter of 2014 was around five per cent among all regions when compared with an increase of just one per cent in the earlier quarter. According to Insite, a quarterly real estate report, the new launches, positive consumer sentiments, developers declaring possession of new projects along with a boost in the infrastructure developments has surged the movement.

The three ideal locations for investment in the city are MMR, Thane, & Navi Mumbai. They have shown an increase of 5%, 3%, & 6% respectively in the last two quarters of 2014, & are expected to continue doing so in 2014. Investing in a property in Navi Mumbai can prove to be extremely beneficial in the present time.

2. New Delhi

The capital of India, Delhi has been on the growth radar since beginning of the year 2014. It showed a strong positioning in the real estate market by being on the 14^th position in 2015, which was earlier on 21^st position in the year 2012 & 2013. The factors that led to this surge are:

• Mixed income demographics
• Excellent infrastructure & connectivity
• Great infusion of both retail & commercial spaces

For the investors looking to invest in the city, the fact that there is now a stability in the new government & various key policy announcements have been made in the real estate front at the Centre have created a positive sentiment. According to Insite, this has increased the capital growth by 3% since the last two quarters of the year 2014.

If you are looking to buy a house in Delhi, the three areas that have shown high growth are - Delhi West, Gurgaon & Greater Noida. The percent increase they showed were 5%, 4%, & 4% respectively.

In the present scenario, investing in a property in Delhi West can be seen as beneficial in terms of returns.

3. Bangalore

The Electronic capital of India, Bangalore is popular as the haven of property seekers. New launches & development of the micro markets were on an all-time high last year. This trend continues to grow in 2015 too. Bangalore stood at 17^th position while it was 19^th & 20^th in 2013 & 2014 respectively. The reasons that led to this rise were:

• Most of the micro markets being extremely affordable
• IT sector dominates the city, making it an ideal location for millions of employees
• Continuous infrastructure development

For the property seekers’ wanting to buy a house in Bangalore, the infrastructural growth & increasing economic activity in the city has been the major driver of growth. According to Insite, Bangalore’s real estate market increased at a rate of 5% in the last quarter of 2014; making it come in the list of the top cities to invest in.

For someone looking to buy a house in Bangalore, the three key areas that have shown a constant growth are Bangalore East, Bangalore West, & Bangalore South. The increase percent in the last quarter for these were 7%, 5%, & 5% respectively.

Looking for a property in Bangalore East is good for buyers expecting high future returns.

* The insights are from the PWC report on emerging trends in real estate Asia Pacific 2015.

Factors like new project launches, high infrastructure developments, stable government, & growth of micro markets, etc. have led to the change in sentiments of developers & buyers. This has led to an increased effort to maintain the demand & supply equilibrium. The current surge can be expected to grow further this year.

2015 has announced itself as the year of real estate.

Author Bio: Tripti writes on the behalf of 99acres.com. Her articles talk about new developments in the real estate industry. She is an avid fiction reader, craftsman & a keen observer. Being someone who just observes without having a point of view, she keeps herself updated in real time.

Disclaimer: The above article & the insights it provides are based on the author’s analysis based on published reports. Though the information & analysis are perfectly thorough and highly informative, RealT Horizon takes no responsibility for the investment decisions based on the article. Readers are suggested to analyse themselves & invest accordingly.

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Small Properties in Thane, Mumbai (Guest Post - Rashmi Karan)

The Increased property rates in Mumbai have forced the buyers to move towards the suburban localities of the city, one of which include Thane East and West. Thane is among those suburban localities around Mumbai that offers good options for the buyers belonging to the middle-income group. This area serves as the perfect investment destination for the mid income buyers.

The Infrastructure

Spread over an area of 147 square kilometres and ensures excellent connectivity with Mumbai through various linking roads, which are the State Highway 42 and the Eastern & Western Expressways. Thane has very good rail connectivity through the local rail lines between Thane-Vashi and Thane-Panvel. It is also well connected to other neighbouring suburbs through the suburban rail network of Central Railway.

The Localities

Localities like Dombivali, State Highway 42, also known as Ghodbunder Road, Badlapur, and Kalyan West alone account for around 40% of the total supply of 1 BHK units in Thane. These areas have also witnessed tremendous infrastructural developments along with modernization with the construction of several shopping malls, and other commercial establishments. Such developments have greatly improved the growth prospects of the localities.

The most popular types of housing units in both Thane East and West are the 1 BHK flats. The buyers look forward to invest in the 1 BHK flats as compared to a 2 BHK or a 3 BHK flat. Undoubtedly, Mumbai is the winner when it comes to demand for small sized flats and homes. However, due to spiraling property rates in Mumbai, people have started to shift to the suburban locations to find less costly accommodation, and this has certainly given a boost to the realty segment of Thane.

The main reason why people look out for smaller flats is that they think it is better to invest in flats rather paying a hefty sum as rentals. These days, the rentals of a 1 BHK flat and the EMI on a home loan are equivalent. In fact, in certain localities, the rentals are much higher than these EMIs, suggest the market experts.

Reasons for growth of Thane as Realty Hub

Some of the remarkable reasons for the growth of Thane as real estate destination are excellent connectivity with Mumbai and other suburbs, infrastructural developments, and lesser capital values. Thane has built up its buyer’s base for small sized homes. Flats having a total built up area of 500-650 sq. ft. are available in the price range of Rs. 3,000-4,500 per sq. ft. If you wish to buy a 500 sq. ft. property in Thane West or East, you will have to pay somewhere around Rs. 15 lakh. On an average, the price range of 1 BHK flats in these localities is somewhere between Rs. 15-32 lakh, which is pretty affordable.

A number of builders who were earlier targeting Mumbai for development of new projects have now headed towards Thane and have rode the wave of success. Some of the builders and developers like Indoasian Buildcon Pvt. Ltd., Lodha Group, Siddhi Real Estate Developers, Kabra Builders, Puranik Builders, Swami Developers, Skylark Constructions Pvt. Ltd., to name a few, are offering 1 BHK flats in Thane West and East. In addition, the interested buyers can also look forward to invest in the 1 BHK flats in Dombivali East and Kalyan West also.

If the market experts are to be believed, Thane has been able to attract the buyers owing to availability of properties at affordable rates, and such growth is expected to continue in future. Those who have a detailed knowledge of the market, expect that there will certainly be a hike in the prices of properties in Thane. Some new realty developments are also planned.