Manoj has over 25 years of management experience, both at national and international levels, with large clients and multinationals. He has previously headed Facilities and Procurement divisions for various multinationals including GE Capital International, Dell & Lucent Technologies. In his last role he was Vice President, Corporate Services at Deutsche Bank AG.
Where is the growth corridor of Noida that could lead this market as another case study in attracting that kind of investment? The answer to this is not easy, not because of lack of a growth corridor but due to the problem of plenty. While the Atta Market of sector 18 continues to be its main Central Business District (CBD) even today, the emerging growth corridors are even better positioned to put Noida high on the radar of investors.
A closer look at some of the leading property markets of the country, like Mumbai, Pune, Chennai, Hyderabad and Bangalore, clearly suggest that the market is poised for an upswing in the next few years. More importantly, it is not just the analysts but also the home-buyers who are today; ready to bet high on the long term growth story of the property market in these leading cities.
There is currently a shortage of 20 million homes. By 2030, 590 million Indians will live in cities, necessitating a further $2.1 trillion of capital investment in infrastructure. The challenge to house the future population is urban in scope and unprecedented in scale.
What makes Mumbai a global real estate market to bet on? There are many USPs of the city property market to make it a global property market, like luxury landscape of the city; its positioning as a job market; social life of Mumbai; investment in the city; appreciation potential; and insulation against price crash. Mumbai is one of those markets that have also weathered the slowdown challenges without crash; not even New York, London or Dubai have this distinction.
A high rental growth was seen mostly in South cities like Bengaluru, Chennai and Hyderabad where y-o-y change ranged between 8-17% at some locations. In H1 2017, Bengaluru and Hyderabad both witnessed single digit vacancy levels hovering between 8-9% due to a dearth of quality Grade A stock, thus leading to increased rental values in some micro markets.
Many of the homebuyers in their desperate instinct are thinking of immediately stopping EMIs (Equated Monthly Installments) to banks. However, many of them are conscious of the fact that stopping EMI is not a solution. If buyers stop servicing their home loans (as they are not sure if they will get a house), it may impact their credit rating.
Be it Mumbai or Pune in the Western part of India or Hyderabad, Bangalore and Chennai in the South, the homebuyers seem to be convinced with the reality of GST and its implications with various stages of construction. It is hence not surprising that most of the homebuyers across the cities today wish to invest in ready to move apartments to save from the hassles of paying the GST.
There are very few case studies where the developers have flocked out to cities on sheer promise without registering their presence in the four metro cities. However, such migration to magnet territory is today quite visible in Gujarat where the developers from other states are increasingly flocking, most notably in the city of Ahmedabad.
As per Colliers Research, RERA and GST compliance will remain a challenge for several developers for at least the next six months. We expect a decline in the number of launches in H2 2017. However, the sales are likely to pick up during the festive season due to higher optimism among buyers after RERA.