My sister bought a house in late 2006 in a suburb adjoining Mumbai for Rs 15 lakh. Recently, she sold it to buy a bigger home. Lucky for her, by now, the value of her house had appreciated by almost 100%! So, have you missed the property bus? No, it seems.
Moneycontrol spoke to experts and the consensus is that 2008 too, holds a lot of promise for real estate investors. The key: find the right location.
Hot property destinations
Although the demand in the metros continue, it is the smaller cities, which have a great potential to generate better returns for investors.
Anuj Puri, Chairman and Country Head, Jones Lang Lasalle Meghraj sheds some light on this. He says, “Emerging localities are a much better bet compared to saturated, bigger cities. As the prices in big cities continue to remain high and since optimal investment requires low entry levels and appreciable growth within a realistic time frame. Therefore, as one or the other destination reaches its peak potential on all these counts, new ones come into the limelight.”
The research firm puts together this handy list for you when you go property shopping.
Where: Vizag
Why? Vizag’s growth drivers are availability of land at cheaper cost vis-à-vis Hyderabad, relatively low cost of skilled manpower (as well as lower attrition rates), improving infrastructure and considerable demand. The market also has lesser competition and project costs are lower, leading to increased margins. Meanwhile, overall purchasing power in Vizag is high. The upcoming commercial and retail destinations in Vizag are Dwarakanagar, Seethamadhara, Gajuwaka, Rushikonda, Anakapalli, Bheemili and Paarwada. For residential investment, the best areas now are Madhurawada, Pendurthy, Parawada, Bheemunipatnam and the areas towards the Anakapalli Corridor.
Property rates:
Seethammadhara: Rs 1,400-3,000 per sq foot
Murali Nagar: Rs 1,400-2,200 per sq foot)
Beach Road, MVP colony: Rs 2,800-3,500 per sq foot
Siripuram: Rs 2,500-3,200 per sq foot
Parwada: Rs 1,200-2,000 per sq foot
Where: Vadodara
Why? It definitely ranks high among the emerging investment destination due to various projects. The prime residential areas are Alkapuri, Race Course Road, Old Padra Road, Jetalpur, Akota and Fatehganj.
Property rates:
Old Padra Raod: Rs 1,200-1,500 per sq foot
Alkapuri: Rs 1,900-2,300 per sq foot
Race Course Road: Rs 1,500-1,800 per sq foot
Fatehganj: Rs 1,300-1,700 per sq foot
Where: Dehradun
Why? Dehradun is seeing a gradual but definite boom associated with the rise of malls in the region. Land rates are rising and there is considerable infrastructure development. Another driver is the growth of Information Technology (IT) sector in the region. The State Industrial Development Corporation of Uttaranchal is setting up a high technology software park on more than 60 acres of land at Dehradun. Chatrata Road, Mussoorie Bypass and Sahastradhara Road are the best locations for small to medium investors.
Property rates: The current rates begin at Rs 3,500 per sq yard. Here will be between 10-12% of appreciation over the next three years.
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Where: Indore
Why? Indore’s real estate star is fundamentally on the rise, and offers good investment opportunities in project with low entry cost that are located in an area with good appreciation potential.
Property rates:
Vijay Nagar: Rs 3,000-10,000 per sq foot
Bypass, A B Road: Rs 3,000-10,000 per sq foot
Rau: Rs 600-1,200 per sq foot
Gulmohur Colony: Rs 3,500-6,500 per sq foot
Green Park Colony: Rs 800-3,500 per sq foot
Where: Nashik
Why? Nashik is displaying an increasingly buoyant industrial scenario, with considerable growth expected in the IT/ITES industry. Overall infrastructure and connectivity Mumbai and other regional towns is improving rapidly, lending increased credibility to Nashik’s real estate market. It is a vertex of the Pune-Mumbai-Nashik Urban Golden Triangle. The upcoming suburbs of Anandwalli (Gangapur Road), Indiranagar, Untwadi, Aadgaon (off Mumbai-Agra Road) and along Pathardi Link Road bear special watching.
Property rates:
Gangapur Road: Rs 1,200-1,900 per sq foot
Mumbai Agra Road: Rs 800-1,600 per sq foot
Agra Road: Rs 600-1,000 per sq foot
Where: Guwahati
Why? The capital city of Assam has witnessed a population growth of over 40%, in the last ten years. This extensive population growth has been responsible for a quiet revolution on Guwahati’s real estate market. There is an upsurge in the retail sector, and outskirt locations such as Khanapara, Zoo-Narengi Road, Basistha and Beltola are emerging as the new residential destinations.
Property rates: Current rates range between Rs 1,800-2,500 per sq foot. The upcoming Games Village at Sarusajai will add a new flavour to the residential market along NH-37.
Where: Chandigarh
Why? Though there has been a lot of speculation on Punjab’s real estate market, Chandigarh is among the emerging cities that are seeing very encouraging real estate trends. It is India’s first planned city, and it conforms perfectly to the key parameters by which we judge a city’s growth -- property market, people, physical infrastructure, social infrastructure, and business environment. Chandigarh scores very high on these counts, especially in terms of the potential of its property market. Chandigarh’s boom derives from the rapid development taking place on its outskirt areas.
Property rates:
Panchkula: Rs 2,500-3,000 per sq foot
Mohali: Rs 1,500-2,500 per sq foot
Dera Bassi: Rs 1,300-2,000 per sq foot
Zirakpur: Rs 2,700-3,200 per sq foot
The hidden gems
Pankaj Kapoor, MD and CEO, Liases Foras, a real estate research firm lists out some more cities that should be on every real estate investor’s radar. .
Nagpur: Plans have been finalised to develop Nagpur as the logistics and cargo hub of India. “This along with decent land prices will propel Nagpur in the big league in the coming years.” Says Kapoor.
Pune: Despite, the ‘time-line perspective’ ie the growth for a period followed by a slowdown, this city remains an attractive destination for your real estate dreams.
Navi Mumbai: This fast-growing area adjacent to Mumbai can be a very good value for your investments due to the upcoming economic hubs in the adjoining regions. “Panvel and Uran are especially areas to watch out for,” adds Kapoor.
Want to buy a home? Don't wait!
If you want a place to live in 2008, you should go for it! The reason for this according to Harsh Roongta, CEO apnaloan.com is,' Timing the prices in property market is not only difficult but very risky as well.' Of course, provided you fulfil any of these three conditions, suggested by Roongta:
1. You are sure that you would like to live in the city long enough to justify the purchase.
2. You are confident about a steady income and an increase in it in the coming years.
3. You can afford the purchase and repay loan EMIs with ease.
Roongta believes that the real estate prices are going to go up eventually, and waiting for correction may not be a great idea.
(Kapildeo Singh for moneycontrol.com)
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