Real Estate Investment – Page 12

Which Mumbai Real Estate Locations Still Deliver Good ROI?

Anuj Puri, Chairman – ANAROCK Property Consultants

Real estate prices in Mumbai – India’s high-flying financial capital – are never out of the news.

From South Mumbai’s spectacularly pricey trophy properties to the chronically unaffordable price tags of what passes for mid-income and affordable housing in the city, there is no getting over, under, around or through the extremely high property prices in Mumbai.

Mumbai’s sky-high real estate rates – what lies beneath?

Before we go into which parts of Mumbai can still reap decent returns on real estate investment, it is important to understand why the city was such an investment hotbed in previous years – and in fact still draws patient, well-capitalized investors.

Of course, the city’s extremely steep capital and rental values were (and continue to be) their primary incentive. There are several reasons for Mumbai’s exorbitant property prices – some are logical and have to be accepted as facts of life here, while others have more to do with unabashed market manipulations.

Supply-related challenges

Geographical constraints:

Its unique geographical attributes have been one of the leading factors influencing the astronomic property prices in Mumbai.

by Santhosh Kumar

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

The Golf Course Extension Road has emerged as one of the most sought-after residential corridors of Gurugram.

While not being priced as high as the neighbouring Golf Course Road, it offers multiple apartment options for the upper-mid segment moving up the value chain to luxury housing options as well.

This residential corridor has seen more than 8,500 residential apartment units launched overall, and many of them are in advanced stages of construction. Around 2,500 residential units have been delivered here with another 2,600 slated for completion by 2019-end.

This residential market has a good mix of end-user as well as the investor segment who have in the past achieved healthy capital appreciation across their investment/purchases. The healthy completions pipeline had also resulted in a robust secondary sales market in this corridor.

The consistent price appreciation on Golf Course Extension Road caused sales to dampen slightly, and the overall slow market for high-ticket sized apartments has also impacted the sales velocity in this corridor.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Real estate investors need to be an exceptionally canny lot, since various factors can negatively affect the value of one’s real estate assets. Being aware of these – and making suitable provisions and allowances for them – is an inalienable part of successful property investment.

The rising cost of money

Increasing inflation is the first factor that inhibits the profitability of a real estate investment. While investing in any kind of property solely for capital appreciation, one should always consider what the overall earnings would be worth at the point in time one wishes to liquefy them.

If one fails to plan for the inflationary effect, further property purchases may be out of reach – rendering the whole concept of real estate investment an exercise in futility.

A simple method of establishing whether inflation will erode one’s real estate investment is to determine if the interest rate earned on one’s savings is less than or equal to the rate of inflation. If it is, it means that your real estate investment too will suffer because of inflation.

by Prashant Thakur

Prashant Thakur, Head – Research, ANAROCK Property Consultants

Vartak Nagar is a residential suburb in Thane once known largely for its tapered roads and deplorable infrastructure. The residential market was predominantly defined by low-rise developments that housed industrial workers from the nearby manufacturing units.

Today, with the rapid urbanization of Thane and its surrounding precincts, Vartak Nagar has witnessed a significant upgrade in terms of both civic and social infrastructure, and its revamped market profiling has turned it into a promising real estate destination in the Mumbai Metropolitan Region (MMR).

It now has excellent road connectivity to the central and western suburbs via the Eastern Expressway and Western Express highway (via Ghodbunder road) respectively. Vartak Nagar is also well-connected through an established rail network.

Its proximity to the serene Upvan lake and exquisite view of the scenic Yeoor hills have become the major drivers of consistent real estate growth in Vartak Nagar.

Moreover, it still has an abundant supply of land parcels (primarily through the redevelopment model) available at competitive prices. This is a major draw for developers of residential projects since the lower land prices allow them to sell their properties at attractive rates.

by Anuj Puri

Commercial, warehousing the flavours of 2018; affordable housing’s continuing allure

Anuj Puri, Chairman – ANAROCK Property Consultants

Sluggish demand along with bleak returns on investment has dented the previously glowing charisma of Indian residential real estate in the preceding 2 to 3 years.

The cascading effect of demonetization, implementation of RERA and GST further dampened investment traction in this segment in 2017, leading to a decline in average prices between 5 to 7% during the period.

Although the tail-end of 2017 showed some signs of revival in the sector and there was an uptick in sales of ready-to-move-in properties, the multitude of existing challenges will continue to be felt in 2018.

The huge unsold inventory on the market and the possibility of distress sales in the offing will limit the possibilities of any significant price appreciation in near-term.

During the year 2017, PE investments into the residential asset class fell significantly and witnessed a loss of around 25% in overall share compared to the previous year. Also, for the first time in last three years, it lost its #1 position in PE investment share.

by Prashant Thakur

Prashant Thakur, Head – Research, ANAROCK Property Consultants

Once a quaint settlement known for its scenic beauty with lush green trees and inhabited by Eurasians and Anglo-Indians during the late 1880s, Whitefield has witnessed a shift from being a settler’s haven to one of the sought-after real estate destination of Bengaluru.

Whitefield is one of the key tech hubs in Asia and has evolved as a preferred residential real estate destination.

Falling in the eastern periphery of the Greater Bengaluru region, Whitefield is a burgeoning micro-market with a rich history of over 200 years. However, the spurt of real estate developments in Whitefield dates back to early 2000s when the IT-ITeS sector began to boom.

The establishment of Export Promotion Industrial Park (EPIP) and International Technology Park of Bengaluru (ITPB) shaped Whitefield into a buzzing suburb. Today, more than four lakh ‘techies’ work in various multi-national companies located here.

Over the last few years, Whitefield’s skyline has metamorphosed into tall skyscrapers and big residential communities. The housing demand in this region is primarily driven by the IT professionals working in nearby office complexes.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

India has registered a historic improvement in latest ranking for Doing Business, released on 31st October by the World Bank.

In fact, it is one of the top ten improvers for the current year assessment, thanks to the implementation of key reforms pertinent to 8 out of the 10 indicators that World Bank factors in for this index.

With the overall ranking of India in the Ease of Doing Business jumping from the 130th to the 100th place compared to previous assessment, India is the only large country displaying such a significant improvement. How has real estate performed in this improvement? Actually, it’s a bit of a mixed bag.

India’s ranking for Dealing with Construction Permits has improved from 185 to 181, for Resolving Insolvency the improvement has been from 136 to 103, and for Paying Taxes from 172 to 119. However, on the parameter of Registering Property, it slipped 16 places from 138 to 154th.

The key reasons for the lower ranking in for this vital criterion when compared to other counties are the continuing multitude of procedures to follow and therefore more time developers have to spend in pursuing them.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

From official acceptance to investment safety, crypto-currencies are nowhere near becoming viable tender to buy real estate in India.

Bitcoin and other cryptocurrencies have been in the news a lot in recent times, often for the wrong reasons, but also because of the massive appreciation Bitcoin has been clocking up.

To top it off, real estate has now been dragged into the Bitcoin controversy, with a handful of projects in some parts of the US and Dubai actually inviting investments via the Bitcoin route.

With the ongoing slump in sales, is it possible that developers in India will offer such an option to prospective buyers as well? Let us take a closer look at this.

We should begin by understanding that the viability of any currency as a means with which to transact in real estate in India obviously depends on whether or not the RBI and Government recognize that currency as valid tender in the country.

So far, that is not the case with Bitcoin.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The year 2017 has not exactly lived up to the expectations of the residential property sector. RERA has been deployed, but as of today, only 18 states and 7 Union territories have notified RERA, while 10 states are yet to notify it.

While RERA has certainly already made its expected effects felt in states like Maharashtra – which includes very important markets like Mumbai and Pune – it has not yet extended its full influence over parts of the country where RERA it is probably needed the most.

Though Haryana and UP have notified RERA, they are yet to set up the portal via which developers can upload their applications for registration of their projects. The web portal is also critical for buyers, as this is where they can check the details of projects. Also, these two states have come under heavy criticism for diluting the Centre’s RERA norms.

by Anuj Puri

Anuj Puri, Chairman – Anarock Property Consultants

With several property developers in Delhi-NCR and elsewhere developing skyscrapers of 150-250 metres and more, an increasingly pressing question being asked by property buyers is whether they safe.

This is obvious and natural, given the increasing incidence of fires, earthquakes and building collapses that the media throws at us fairly regularly. Let us take a closer look at this.

As opposed to the scenario seen in more developed countries, there are still various problems with implementing strict norms for the structural safety and fire safety for high-rise buildings in India. In fact, as we have seen in a recent case of a residential tower in London, this can present a challenge even in such global cities.

However, considering the rapid pace of urbanization being seen in cities like Delhi-NCR and Mumbai, there definitely need to be stricter and enforceable safety norms for skyscrapers. Here are some guidelines.

Earthquake Resistance:

While fire safety is one aspect, earthquake resistance of high-rises is a relatively lesser cause of concern.

Which Mumbai Real Estate Locations Still Deliver Good ROI?

A Quick Look at Golf Course Extension Road, Gurugram

3 Factors That Can Negatively Impact Property Investment Profits

The rising cost of money

Thane’s Vartak Nagar – A New Real Estate Hotspot Emerges In MMR

Why Residential Real Estate Is A Fading Blip On Private Equity Radars

Bangalore’s Whitefield: From Anglo-Indian Village To Vibrant IT-ITeS Hub

Why Improved Ease of Doing Business Will Boost Real Estate Funding In India

Will You Buy Real Estate With Bitcoin In India Anytime Soon?

A 2017 Festive Season Primer For Homebuyers

Focus On Safety Measures In High-Rise Buildings