Top 6 Destinations to Invest in Indian Real Estate in 2017

The Indian real estate has certainly come of age. In fact, it is a step closer to becoming more mature, transparent and professional and one which will yield realistic returns over a period of time. Interestingly, like many western markets, the investors here have also become more realistic in their expectations of the returns on investments. This is certainly a positive sign for future growth.

So, are you in a dilemma as to whether you should invest in real estate in 2017 or not?

Well, frankly speaking, there couldn’t be a better time than this! Amidst all the positive policy changes like RERA, GST, Benami Act, among others, the sector is on its way to an upward trajectory. Hence, ‘now’ is the best time to invest.

But, if you are confused where to invest then let’s take a close look at some of the hot destinations in India which are likely to yield good returns on your investments in 2017.

1) MMR: Badlapur Region Gaining Momentum

After residential developments in Thane and Kalyan, Badlapur region seems to have become the next hotspot for real estate activities in the MMR. Affordable property values coupled with constant infrastructure upgrades have significantly boosted the realty prospects of this region. It includes areas such as Badlapur East and Neral-Badlapur Road.

In the last two years, entire Badlapur region has seen the new launch supply of nearly 9,000 units (as per market data). Interestingly, nearly 99 per cent projects had affordable units. With a plethora of new launches and under-construction projects, this region will see about 84 per cent ready-to-move-in supply by 2017

2) Kolkata: Realty Focus Shifts to North

Eastern markets have always been on the forefront in Kolkata’s real estate. However, the year 2016 took an interesting turn with maximum new launch supply in the northern markets of the city.

As per market data, Kolkata saw launch of approximately 13,200 new units in 2016. And interestingly, out of the total units launched, nearly 50 per cent was in North Kolkata. Affordable property values and various infrastructure projects have largely helped micro-markets in the North.

In terms of market segmentation, nearly 74 per cent units launched were in the affordable category, followed by 19 per cent in the mid-segment and merely 7 per cent in the premium segment. On an average, capital values in the northern markets fall in the price brackets of Rs 1,800-2,700 per sq.ft.

Uttarpara, Dankuni, and Jessore Road were three major markets in the North that saw healthy new supply in 2016. In terms of numbers, about 2,400 new units entered Uttarpara, while in Dankuni and Jessore Road about 2,400 and 850 units entered respectively.

3) Chennai: Western region Gaining Momentum

Chennai’s real estate growth story has been written primarily around either Old Mahabalipuram Road or East Coast Road. Besides cities like Bangalore and Kolkata, Chennai also saw an interesting shift in trend this year.

As per data, new launch supply in both South and West Chennai was at par. Just to throw a number, out of the total supply in the city, about 48.1 per cent was in the southern part while 48.2 per cent in the western part. The major micro-markets in the region are Oragadam, Vadapalani, Vanagaram, Poonamallee, and Iyyappanthangal.

As per the market segmentation, the region is primarily dominated by affordable properties (41 per cent), followed by mid-segment and luxury with 40 and 19 per cent respectively.

4) Delhi-NCR: Greater Noida Leading the Show

Thrown open to public in 2011, the Buddh International Circuit placed Greater Noida on the global map. And with realistic property rates and several infra projects on the anvil, it has never looked back. Moreover, Greater Noida enjoys strategic location, excellent inter and intra-city connectivity and ample green space. Further, due to the presence of several manufacturing and automobile ancillary units, the city is witnessing robust growth.

In terms of data, Greater Noida is clearly leading the show as far as maximum new supply is concerned. From January till November, NCR recorded new supply of about 29,700 units, out of which nearly 24 per cent was in Greater Noida. Few of the prominent projects launched were Le Solitarian Estate, Aarcity Foreste, Migsun Wynn, Galactic City, among several others.

5) Hyderabad: Gachibowli and Manikonda see high activity

Relatively lower property prices coupled with various infrastructure upgrades has significantly helped Hyderabad attract a lot of real estate investments over the last two years. Also, there has been increased commercial activity ever since the state bifurcation happened. While several micro-markets saw decent new launch supply in 2016, these two markets in the western region maintained their monopoly over the residential new launches.

Gachibowli and Manikonda saw maximum new residential launches over the past two years. In the last three years, nearly 6,900 units have entered Gachiblowli alone while Manikonda has seen about 1,600 new units in the last two years. Good connectivity, robust infrastructure and presence of IT/ITeS companies in the vicinity are the three major factors catalysing demand in these areas.

Interestingly, both Gachibowli and Manikonda have also recorded decent price appreciation in the last few years. In 2012, the weighted average price in Gachibowli and Manikonda was Rs 3,740 per sq.ft. and Rs 2,400 per sq.ft, which increased to Rs 4,084 per sq.ft. and Rs 3,130 per sq.ft. respectively in 2016.

6) Bangalore: Northern residential market takes a leap forward

While majority of the new launch supply in 2016 was seen in southern and eastern micro-markets, it is interesting to see significant activity happening in the Northern region. Micro-markets such as Hennur Main Road, Thannisandra Main Road, and Vidyaranyapura have recorded a healthy new launch supply this year. Proximity to the international airport and tech parks (like Manyata Tech Park and Kirloskar Tech Park) have significantly upped the ante of northern region.

As per market data, in the first three quarters of 2016, North Bangalore saw the new launch supply of approximately 7,200 units. Also, there are about 54,900 under-construction units in the North which further indicates that the region will see a lot of ready-to-move-in supply in the coming years. To be precise, nearly 35 per cent projects will be ready-to-move-in by 2017.

In terms of market segmentation, mid-segment properties dominate the property spectrum in the North with 51 per cent. This is followed by 28 per cent projects in the affordable segment, 12 and 9 per cent in luxury and ultra-luxury segment respectively.

Demonetization: A Positive Move for NRIs Buying Property in India!

The Indian realty sector has been on a roller-coaster ride since the past several months and the recent demonetization drive has only added to its woes. Much to everyone’s surprise, the realty stalwarts have collectively hailed the move as far-sighted and long-term sustainable. This drive, they feel, will have its short-term repercussions in the form of lower sales volumes but in the long-run the sector will become more transparent, professional and organised. Also, it will go a long way in attracting foreign investors into India who have been on the back foot owing to the unorganized nature of the sector.

Win-win situation for NRIs

The NRIs, who have been an integral part of realty investments in India, are likely to be the least affected by this drive and can surely rejoice. The Indian realty sector is poised to become more transparent and all major dealings in ‘cash’ will now become a thing of the past.

In fact, the move will benefit those NRIs who have to sometimes convert their white money into black so as to buy a home of their choice. This is mainly so because few small developers insisted on some portion of cash transactions. But, going forward, this situation may not persist. All dealings will be done through cheque or online transfers, thereby making it much more convenient and easy for NRIs.

Furthermore, the ‘surgical strike’ against black money is least likely to impact the sales volumes of NRIs in the Indian realty market. Improved market conditions will only strengthen their belief and attract more investments into the realty sector.

Add to this, property prices are likely to see corrections in anticipation that banks will lower the home loan interest rates due to increased liquidity with them. This will invariably prompt more and more buyers to avail home loans to buy their dream home and thus heighten the real estate activity. NRIs can also avail the benefits of lower property prices.

Tier 2 and 3 cities

Other major positive impact of demonetization is likely to be seen in the volume of investments that the NRIs make in Tier 2 and 3 cities across the country henceforth. Earlier, several NRIs refrained from investing in smaller cities and towns because in several instances there was little transparency and professionalism. Ultimately, NRIs invested with reputed builders in metros where the market was more stable.

But now with increasing transparency and professionalism across the country many would be able to invest in their native towns and cities, also their first preference. This will also give a major push to the real estate activity in Tier 2 and 3 cities. Some of the regions which have seen high real estate activity by NRIs in the past include Kerala, Karnataka, Delhi-NCR, MMR and Tamil Nadu.

All said and done, NRIs are in a win-win situation as far as pricing and good product is concerned. With RERA into effect, their interests are further safeguarded even while they are sitting in faraway countries. A slew of other government initiatives including the ‘100 Smart Cities’ mission and clarity on REITs are only making the real estate investment scenario more lucrative for NRIs in the long run.