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 BangaloreChennai 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 KumarSanthosh 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.

Panoramic_view_of_Greater_Noida

Santhosh KumarSanthosh 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,

Resale home

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.

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

For a very long time, real estate developers and investors focused almost exclusively on the metros and tier 1 cities, as these were considered the safest bets for sales and returns on investment. After all, these cities were generating the most employment and therefore inward migration.

As a result, the metros and tier 1 cities across India are currently experiencing the immense pressure of overpopulation due to urban migration in search of better livelihood and enhanced quality of life, thus resulting in an inadequate infrastructure for the citizens.

The Smart Cities Mission, launched in 2015, aims to tackle the escalating problems being faced in urban areas with regards to transportation, energy supply, governance, basic urban infrastructure services and overall quality of life.

Although the mission is trying to address these issues to a certain extent, the challenges of remodelling India’s tier 1 cities into smart cities are considerable, as many of them have reached their saturation point.

Tier 2/3 cities stage a comeback

As a result, more and more real estate demand and supply are now drifting down towards tier 2 and tier 3 cities of the country.

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

Gurugram Residential Real Estate

The Millennium City of Gurugram has a very prominent place on India’s residential real estate map and is considered a bellwether of the state of the market for NCR.

If we study what happened in the city’s housing market in the first quarter of 2018 against the same period in 2017, some interesting changes emerge.

Pricing

  • Q1 2018– The weighted average price for housing properties launched between January to May in 2018 is INR 4580/sq.ft.
  • Q1 2017– The weighted average price for housing properties launched between January to May in 2017 was INR 4,300/sq.ft.

In other words, we are seeing an uptick in pricing for newly-launched housing projects in Gurugram, in line with the returning end-user demand as a result of improving market transparency.

Launches

  • In Q1 2018, approximately 4,100 new units have been launched in Gurugram,

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

Despite being hit by the overall slowdown in the real estate market and seeing price corrections up to 10% in most areas, Delhi-NCR continues to be attractive to end-users and investors. Being the national capital, Delhi attracts migrants from all across the country.

In fact, as per the Economic Survey of 2017, Delhi, Noida, Greater Noida and Gurugram saw the maximum influx of migrants between 2001 and 2011. Obviously, there is a dire need to fulfil the housing needs of these migrants.

As per ANAROCK data, the housing supply in Delhi over the last two years has been fairly low as compared to its counterparts – Gurugram and Noida. This is essentially due to demand-supply mismatch; there is massive demand for affordable housing in the city, while property prices in most pockets of the city have skyrocketed.

Consequently, the pockets that offer affordable or mid-segment projects have been performing relatively better than the expensive ones – such as Greater Kailash II, Panchsheel Park and South Extension II, to name a few.

In 2018 as well,