Mum­bai best for res­i­den­tial prop­erty in­vest­ment

Hindustan Times (Chandigarh) - Estates - - ESTATES - Ash­winder Raj Singh ht­es­tates@hin­dus­tan­times.com ■

The top five hotspots for res­i­den­tial prop­erty in­vest­ment in the coun­try to­day are Mum­bai, Beng aluru, Hy­der­abad, Ahmed­abad and Chen­nai. These cities are more or less reg­u­lars on most hotspot lists, but there is a sound ra­tio­nale be­hind their con­sis­tent per­for­mance year after year. Not only are these cities at­tract­ing new busi­nesses and in­dus­try, their re­spec­tive gov­ern­ments are also in­vest­ing re­sources in build­ing ad­e­quate in­fra­struc­ture to at­tract cap­i­tal.

With their lo­cal economies grow­ing, the in­flux of tal­ent and skilled work­force into these cities is in­evitable, and this nat­u­rally re­sults in in­creased de­mand for res­i­den­tial prop­er­ties. Also, the ear­lier slow­down in the econ­omy and glut in the real es­tate sec­tor has en­sured that prices in these cities have come down, and devel­op­ers ac­tive there have now in­vested in launch­ing af­ford­able hous­ing projects that are in high de­mand. With the econ­omy now on the growth path, more peo­ple will have money to in­vest in real es­tate – which still re­mains the in­vest­ment pre­ferred as­set class for most In­di­ans.

These cities boast not only of avail­abil­ity of ba­sic in­fra­struc­ture in terms of elec­tric­ity, wa­ter and other ameni­ties, but are also im­prov­ing in terms of com­mu­ni­ca­tion and com­mut­ing fa­cil­i­ties such as met­ros and road de­vel­op­ment. They also of­fer a bet­ter qual­ity of life be­cause they have a good sat­u­ra­tion of leisure and en­ter­tain­ment fa­cil­i­ties. This fac­tor boosts the po­ten­tial for out­right sales and in­creased rentals.

While Hy­der­abad, Ben­galuru and Chen­nai are the IT hotspots, Mum­bai is see­ing Navi Mum­bai’s ad­vance­ment as a growth cor­ri­dor due to the in­creas­ing sat­u­ra­tion of the main­land. These cities are see­ing a con­stant growth in em­ploy­ment op­por­tu­ni­ties, at­tract­ing peo­ple from all over the coun­try. This has nat­u­rally led to a lot of new res­i­den­tial projects be­ing launched, es­pe­cially in the high-de­mand af­ford­able seg­ment. As a re­sult, NRIs look­ing for lu­cra­tive re­turns in new de­vel­op­ments in these cities can ex­pect hand­some growth in cap­i­tal val­ues over the mid-to-long ter m, and steady rental in­come in the mean­time. Also, the reg­u­la­tory en­vi­ron­ment turn­ing pro-con­sumer on the back of RERA im­mi­nent de­ploy­ment, in­vest­ing in res­i­den­tial prop­erty is all set to be­come even more at­trac­tive for NRIs.

OTHER CITIES AS STRONG CON­TENDERS

Since the time the govern­ment an­nounced the list of Smart Cities in 2016, quite a few other cities have also moved front and cen­tre on the in­vest­ment charts. They are par­tic­u­larly on the radar of NRIs fo­cused on res­i­den­tial prop­erty in­vest­ment. These cities in­clude Pune, Kochi, Vishakha­p­at­nam and Indore. The IT/ITeS sec­tor is strong and grow­ing in these cities, and they have the added at­trac­tion of be­ing com­mer­cial hubs and ed­u­ca­tional hotspots of their re­spec­tive re­gions. These cities will show a lot of po­ten­tial for lu­cra­tive prop­erty in­vest­ments in the fu­ture.

2017 - A YEAR OF CHANGE

By April 2017, the en­tire coun­try will be cov­ered by the revo­lu­tion­ary Real Es­tate Reg­u­la­tion and De­vel­op­ment Act, which has been de­signed for ab­so­lute con­sumer-friend­li­ness. This Act will in­fuse a mas­sive dose of trans­parency and ef­fi­ciency into the en­tire In­dian real es­tate sec­tor. NRIs look­ing to in­vest into res­i­den­tial prop­erty in 2017 should fo­cus on States where RERA is al­ready ac­tive. If they have other cities in mind, they will not have to be­yond May 2017, after which the real es­tate sec­tor will be uni­formly level play­ing field for ev­ery­one.

The au­thor is a ceo – res­i­den­tial ser vices, JLL In­dia

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