Real es­tate boom in small towns

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Lav­ina Mulchan­dani lav­ina.mulchan­ n

In Ma­ha­rash­tra, the real es­tate boom is head­ing to small towns. A boost in the af­ford­able hous­ing sec­tor has broad­ened the mar­ket in the state. Young buy­ers, es­pe­cially those with an eye on longterm in­vest­ment are con­sid­er­ing homes in cities that would oth­er­wise have been writ­ten off as fi­nan­cial dead zones.

“Nag­pur, Am­ra­vati, Nashik are at­tract­ing buy­ers for both res­i­den­tial and com­mer­cial real-e state ,” says Panka­jKa poor, founder and man­ag­ing direc­tor of the realty re­search com­pany Li­ases Fo­ras. “The idea that only the cities with IT hubs are be­com­ing realty hot spots is chang­ing. These smaller cities have dif­fer­ent kinds of economies. They’re dom­i­nated by the au­to­mo­bile sec­tor and lo­cal ad­min­is­tra­tive jobs and hence are see­ing in­creased real-es­tate ac­tiv­ity.”

Sales of af­ford­able homes in Nashik and Pim­pri­Chinch­wad have got a boost due to the avail­abil­ity of so­cial in­fra­struc­ture like malls and high­end restau­rants, as in neigh­bour­ing met­ros of Mum­bai and Pune. PANKAJ KAPOOR, man­ag­ing direc­tor of realty re­search com­pany, Li­ases Fo­ras


Data on prop­erty rates and new pro­ject launches show that Tier -2 cities in Ma­ha­rash­tra are ex­pand­ing. A city-wise data re­port by, a prop­erty por­tal, marks nearly 93 lo­cal­i­ties in Nag­pur that are show­ing an up­ward price trend.

“The city has of­fered re­turns of around 20% on the prop­erty in the last cou­ple of years,” says Kapoor. “It has a Metro pro­ject tak­ing shape and is see­ing growth in the num­ber of ed­u­ca­tional in­sti­tu­tions.” The same growth sce­nario is play­ing out in other small towns, as the Mum­bai Metropoli­tan Re­gion and Pune face sat­u­ra­tion and as­tro­nom­i­cally high prices.

The smaller cities are at­tract­ing young in­vestors be­cause they can buy a house here within a few years into a job and get con­sis­tent, de­cent re­turns through rents and sale .“The young buyer does not be­lieve that big cities are the safe st bet for sales and re­turns on in­vest­ment,” says San­thosh Ku­mar, vice chair­man at Anarock Prop­erty Con­sul­tants. “They re­search well and are in­vest­ing in cities that are see­ing a surge in eco­nomic ac­tiv­ity and in­fra­struc­ture de­vel­op­ment. The house prices are lower in cities such as Nashik and Nag­pur, the cost of liv­ing is lower too. You get a house for Rs 30 lakh closer to the city’s cen­tre un­like in Mum­bai where cheap homes are so far, you will end up com­mut­ing for two hours.”


In Nag­pur, the lo­cal­i­ties of Pr a tap Na­gar, Am­ra­vati Road, Prithvi­raj Na­gar and Wardha Road are shap­ing up, says Ma­neesh Upad­hyaya, the chief busi­ness of­fi­cer at prop­erty por­tal “These lo­cal­i­ties are known to of­fer re­turns of around 15%. Rates here are ex­pected to in­crease when the Metro pro­ject is com­pleted in a cou­ple of years .”

He adds that Nag­pur is see­ing many more IT com­pa­nies and B PO firms set­ting up their of­fices. The data by 99acres says that av­er­age prices for Nag­pur have risen from Rs 3,600 per square foot in April 2015 to Rs 4,300 in June 2018.

Am ra va ti is turn­ing out to be a sur­prise pick. “Prop­erty prices are low (around Rs 3,000 per square foot) so it is the good time to take a plunge,” says A Shankar, COO for strate­gic con­sult­ing at realty ad­vi­sory JLL In­dia. “Many new projects are com­ing up and the in­fra­struc­ture is de­vel­op­ing.” He says that the key for a suc­cess­ful in­vest­ment in Am ra va ti is to choose the lo­cal­ity wisely. “The lo­ca­tion should have a bus sta­tion in the vicin­ity, for in­stance. It should also have a hospi­tal and a school close by.”

In­for­ma­tion from 99 acres also sug­gests that av­er­age prop­erty prices in Pim­pri-Chinch­wad near Pune have boomed from Rs 4,850 per square foot in April2015 to Rs 5,350 in June 2018.

“Nashik and Pim­pri-Chinch­wad have seen many more new launches and got a boost in sales for af­ford­able homes be­cause of avail­abil­ity of so­cial in­fra­struc­ture like malls and high-end restau­rants, like neigh­bour­ing met­ros of Mum­bai and Pune,” says Kapoor. The grow­ing lo­cal­i­ties in Nashik in­clude in­dus­trial sec­tors of Oz ad, Am bad, S inn ar, and Satp ur .“These neigh­bour­hoods are boo ming be­cause of de­vel­op­ment tex­tiles and phar­ma­ceu­ti­cal in­dus­tries,” says Upad­hyaya. San­chita Naik, 31, a pro­fes­sor from Thane bought a 2BHK in a new af­ford­able pro­ject in Pim­pri near Pune last year.

She ex­pects fairly good re­turns on her in­vest­ment in a cou­ple of years. “The Pune Metro is on cards, the lo­cal­ity well-con­nected to Mum­bai and Pune,” she says. “I hence ex­pect many more lux­ury and af­ford­able projects com­ing here and more end users buy­ing homes”

Young in­vestors are opt­ing for cities such as Nashik, Nag­pur and Am­ra­vati, as in­fra­struc­ture growth prom­ises bet­ter re­turns on easy buy­ins.

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