Cities Where Real Estate Will Shine In FY17
A slump that has been defining India's real estate market may lose its meaning in the financial year 2016-17 (FY17), as the government and other stakeholders are upping their efforts to revive the sector. According to PropTiger DataLabs analysis, Indian Realty Report FY2016, the property estate is likely to pick further from the trends seen in FY16. “Developers will focus more towards bringing back the confidence of the consumer by being more transparent,” says the report, apart from elaborating on the several government measures that are likely to initiate the good times for the sector.
The report takes into account real estate markets of nine major cities of Ahmedabad, Bengaluru, Chennai, Gurgaon, Hyderabad, Kolkata, Mumbai, Noida and Pune.
As the ray of hope flickers brighter, PropGuide lists four cities where property markets are likely to perform better:
Quarterly reports indicated the real estate in Hyderabad, which witnessed slow growth owing to the statehood agitations in the past, has been scaling new highs. In fact, in a lackluster scenario, Hyderabad was the only bright spot for the sector, as the city witnessed a year-on-year (YoY) growth of six per cent in property prices. A better infrastructure and the IT activity in the city are expected to give a boost to the city's real estate in the near future. Hyderabad's luxury residential market is poised to see remarkable growth, says the report, and may contribute remarkably to the city's overall performance. An indication that developers are eyeing to cash in on the huge potential the city offers, Hyderabad also witnessed the lowest decline in new launches in FY16 at 11 per cent.
An expanding e-commerce market, along with an already thriving IT sector, is expected to fuel the Karnataka capital's real estate in the times to come. According to the report, new launches in Bengaluru saw a decline of 34 per cent, while sales dropped 23 per cent. With an inventory overhang of only 28 months, real estate in Bengaluru witnessed a price appreciation of about three per cent YoY. The affordable localities near the city's special economic zones are expected to witness the best growth, says the report.
The cultural capital of Maharashtra has been a ray of hope for those who saw nothing but bleak growth in India's real estate. At 21 per cent YoY, Pune recorded the lowest drop in sales in FY16 when compared to other major cities. According to the report, multinationals along the Mumbai-Pune corridor and Hinjewadi IT SEZ would bring in more and more population in the city, fuelling the residential demand in future.
Several reports have been indicating buyers are shifting focus towards smaller cities. This is a reason why Ahmedabad in Gujarat may perform better in FY17. In FY16, home sales in Ahmedabad were down 50 per cent year-on-year (YoY), while prices appreciated five per cent in the same period. New launches in the city saw a drop of 46 per cent YoY and this may help bring down the inventory overhang of 34 months. For those looking for affordable housing, the comparatively less expensive inventory may come handy. However, price localities in the city have registered a healthy growth in FY16, too. Some prime localities in this comparatively smaller city witnessed a price increase in the range of 12-17 per cent.
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Hyderabad Ahmedabad Pune Real Estate Bengaluru