Indian residential real estate’s coming-of-age process is marked by the rise of branded developers, who are outpacing their non-branded competition.
Author: Santhosh Kumar
Santhosh Kumar is Vice Chairman of the ANAROCK Group, India's leading real estate services group in India with diversified interests across the real estate value chain. He is based out of ANAROCK’s Gurgaon office, with all the Group's India city leads and its Dubai office reporting to him.
Real estate developers, urban planners, architects, Government bodies, and homebuyers need to work together for a better environment for future generations.
Rainwater harvesting is one solution to the severe water crisis in India. Can we really afford to neglect this straightforward solution?
Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
By what seems like a cruel twist of fate, the grounding of the country’s largest airline coincided with provisional construction approval for India’s largest (by surface area) airport at Jewar in Noida.
It may be recalled that the Allahabad court dismissed petitions filed by farmers and gave in-principle approval to commence the construction of Jewar International Airport, which is estimated to be built at a cost of USD 3.1 bn.
Naturally, the expectation is that just like any mega infrastructure project, this greenfield airport will give a major boost to the overall economic activity around Noida and Greater Noida region. Let’s take a closer look.
Economic Impact Of Jewar International Airport
Once completed, Jewar International Airport will not only ease traffic at Delhi’s IGI Airport but also create multiple job opportunities and give decent impetus to the property market in Noida, Greater Noida and Yamuna Expressway.
These markets have been reeling under tremendous pressure over the last three to four years, and require a fresh injection of opportunity and intent to overcome this slump.
Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
- Bangalore, Hyderabad & Chennai saw a 77% increase in new residential supply in 2018; NCR 16%, MMR & Pune 17%
- Chennai led new launch supply with a 98% increase, Bangalore 91%, Hyderabad 43%
- Bangalore, Hyderabad & Chennai saw a 20% increase in housing sales; 18% in North, 15% in West
The year 2018 was a mixed bag of highs and lows for the Indian real estate sector. The initial pangs of policy alterations seemed to fade away with each region seeing visible signs of recovery across segments.
Even as the liquidity crunch and stalled/delayed projects continue to plague the sector, the main southern cities of Bangalore, Chennai and Hyderabad actually saw faster growth momentum than their northern counterpart NCR.
Retail, commercial and residential real estate saw a lot more activity in Southern cities than in the North.
Residential
As per ANAROCK data, the southern cities raced far ahead of those in the North, including entire NCR.
Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
- Just 63,000 ready units currently benefit out of total 6.73 lakh units across top 7 cities
- Nearly 22,000 ready unsold units completed before 2017 don’t benefit from new rule
- 33% of 5.88 lakh unsold under-construction units in the luxury segment – 49% in MMR – will not benefit immediately
Just when the real estate industry was preparing to give the budget a complete thumbs down, the finance minister sprung a surprise ‘bonanza’ for the sector in the last 10 minutes of his speech. Or so it seemed.
Without a doubt, affordable housing gained amidst what was essentially a mass-appeal budget. However, it was the extension of tax relaxation on notional rent for unsold inventory for another year that cheered developers.
However, under closer scrutiny, it is unlikely to benefit a majority of them as on date.
Anti-climax for developers
Basically,
Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
- Don’t expect all available options to be available online
- The ‘hidden’ costs of renting a home
- The elements of a sound rental agreement
The Government’s much-touted aim to deliver Housing for All by 2022 may not have met with spectacular success in terms of on-ground deployment, but it was certainly a very effective electoral promise. Housing is a sensitive subject in India, precisely because so many people don’t have it. Such an electoral promise was bound to draw attention – and hope.
Providing a self-owned home to every Indian household in the promised timeline seems unlikely. Building enough dedicated rental housing and backing it with a sound rental housing policy could have brought this electoral promise closer to its goal. However, there has been little progress on this front beyond the discussion stage, either.
While a large number of Indians do hope to live in self-owned homes someday, renting homes is still the default option for many. For some, rental housing is seen as a temporary measure until the dream of homeownership is fulfilled.
Developers should not replicate another Yamuna Expressway story
Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
The inauguration of the much-awaited Kundli-Manesar-Palwal Expressway comes at a time when NCR residential real estate needs some serious booster shots to up its flagging game.
And, of course, any infrastructure initiative of such a scale always gets touted to be a game-changer for the real estate market of the concerned areas and regions.
The Indubitable Up-side
The peripheral realty markets of Gurugram and Delhi will benefit immensely from the opening up of this Expressway.
It will not only ease traffic but also create more demand for housing and most other real estate assets, including warehousing and logistics. Other than these, cities like Sonepat, Kundli, Manesar and Faridabad are also likely to see a boost in demand.
One of the immediate impacts of this mega infra project will be enhanced economic activity in areas along the Expressway. For instance, areas north of Delhi that had already become hubs for logistics and warehousing are likely to see spiked industrial investments in various sectors.
Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
Real estate is a dynamic industry where things can change from year to year and even from quarter to quarter. The Indian real estate market has certainly been in flux after the recent policy upheavals. As such, investment decisions must necessarily move with the times.
Here are 2018’s top-ranking real estate investment hotspots in West and North India.
West India
Beyond a doubt, the Mumbai Metropolitan Region (MMR) and Pune have remained West India’s most favourable cities for real estate investment in 2018. The MMR realty market has regained a lot of momentum over the last few quarters, with both sales and new supply increasing q-o-q.
MMR: As per ANAROCK data, out of the total new supply of approximately 50,100 units across the top 7 cities (NCR, MMR, Chennai, Bengaluru, Pune, Kolkata and Hyderabad) in Q2 2018, MMR saw maximum new launches with nearly 13,600 new units entering the market. There was a 59% increase in this new supply as against Q1 2018. On the sales front too,
Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
- 10-12% increase in the number of buyers in the secondary real estate since DeMo
- Property values in secondary market reduced by as much as 5-10% over primary market
The issue of transparency in secondary or resale real estate transactions has indeed been on everyone’s minds ever since RERA stepped in to rescue the primary or first sale-by-developer market.
The question that looms large is – have the Government’s moves to clean up the sector benefited the resale (or secondary sales) market as well?
Overall, the Central Government has put in tremendous efforts towards creating a healthier and regulated real estate market environment.
Implementation of policies like DeMo, RERA, GST, REITs, the Benami Transactions (Prohibition) Amendment Act, 2016 and the Pradhan Mantri Awaas Yojana (PMAY), among others, have brought fresh hope.
At the same time, the Indian real estate market has also witnessed other interesting new trends – a prominent one being the increased demand for ready-to-move-in properties. Various factors were responsible for this rise.