November 2016 | Back to all Real Estate Articles
Real estate dynamics till now has been sober. Property prices did not show any lopsided graphs to the benefit of potential property buyers. However, this sort of information is not enough for investors. Property prices and in-depth information of each city is like fodder to grow returns in the realty sphere.
Vaibhav Jain, an entrepreneur in the industrial glue business is also a real estate investor. Though not very frequent in the investment circle, he ends up purchasing and leasing properties almost thrice in a year. Jain says, "I prefer investing in real estate instead of stocks. Whenever a deal gets through, I invest the money in purchasing a suitable asset. My investments are not limited to a particular city as my family is dispersed all over India. But, having them across does not help while making an investment as one needs to do ground work and research by himself."
For buyers like Jain, there is PropIndex (Jul-Sep 2016), the India Apartment Index by Magicbricks. The report gives an overall picture of the Indian realty landscape. Aspects such as prices, popular configuration, popular property type, etc get covered in detail.
In the Jul-Sep 2016 quarter, Hyderabad witnessed the highest rise in property prices, followed by Greater Noida. Ghaziabad from the Delhi/NCR saw the biggest fall of 2 percent.
If one India can be broadly divided into three geographical zones – North, South and West. The cities under the North zone covers the National Capital Region (NCR), Western zone consists of cities in Mumbai Metropolitan Region (MMR), Pune, and Ahmedabad.
South Zone has the three important cities of Southern India i.e. Bengaluru, Hyderabad and Chennai.
For investors like Jain, who are not bound geographically, the West zone poses as the safest region to make an investment. This zone as a whole has seen the highest weighted average price increment from September 2013 to June 2016. This is followed by the Southern zone, North zone comes last as it has actually seen price decline in the September 2013 to June 2016 period.
To give investors a wider range to choose from, we can delve into the details of each zone and find out the best performing market in that particular region. The performance of the region depends upon the consumer demand and residential supply matrix.
North zone : In this zone, it is advisable to put in your money in Greater Noida properties. The city has been the best performer in terms of price rise. Noida comes second in terms of price increment. Property price level in Gurgaon remained stagnant while Delhi faced a decline.
In case of Greater Noida and Noida, it is important to understand that historic price levels in both the markets were low; this is one of the main reasons for them witnessing highest price increment in the zone.
West zone : Navi Mumbai witnessed the highest gain in the July-September 2016 period. This was because of the fresh large scale development activities that have been taking place in the city. Also, the spilling consumer demand from Mumbai and Thane led to a price rise.
It should be kept in mind that several prominent and high consumer preference localities in Navi Mumbai have properties whose value start at low levels. This also partly explains the 17 percent increment in price index between the September 2013 and June 2016 period.
Apart from Navi Mumbai, Thane has seen a jump in prices over the last few quarters. Property prices of Ahmedabad have been lower than the average for the Western zone, while Pune has also seen slight increment.
South zone : Hyderabad market is the best performing in the zone as it was stagnant so price increment was pending over the last couple of quarters. Bengaluru and Chennai markets come second and third, respectively.
Other than the potential areas, Jain should focus on ready-to-move-in properties (RM) and give under-construction (UC) ones a miss. Though both types witnessed an increase in property values, RM properties commanded an average 9 percent premium over UC properties.
Real estate is a volatile market, susceptible to many internal and external factors. Try controlling the factors that you can for a safer investment.