Which City in India Is Best for Real Estate Investment?

Author: Team Piramal Realty

As the Indian real estate market comes back to life after a protracted slowdown, Piramal Realty gives you a snapshot of the current scenario and future prospects in the country’s top four metropolitan centers today.

Mumbai and MMR

Buying real estate in Mumbai, India’s financial capital, is always a safe bet. But these days, there is a scramble for property registrations, as buyers snap up flats for sale in Mumbai—especially those in posh SoBo-based developments like Piramal Mahalaxmi.

The slashing of stamp duty in the state, bank loan rates hovering at 6-7%, and superb deals from developers like Piramal Realty have created a limited window of opportunity for making a property investment in Mumbai. The speedy return of migrants and resumption of commercial activity—from corporate offices to small-scale industries, retail stores and restaurants—have also contributed to the positive buyer sentiment.

Little surprise, therefore, that property sales in November 2020 in the Mumbai Metropolitan Region (MMR) were an eye-popping 67% higher than in November 2019. 

Capital returns on property in Mumbai are also set to increase thanks to upcoming mega-infrastructure projects like the Metro extension and the Coastal Road. These projects, due for completion in the near term, are on the radar of both home-buyers and builders in Mumbai. Once finished, they will boost linkages between major commercial and residential clusters in Andheri, Parel, Thane, Navi Mumbai and South Mumbai. Air travel to and from Mumbai will also get a fillip with the new airport in Navi Mumbai, expected to start operations in near future. 

As buyers explore different options, housing demand is growing across the length of the city: from tony south Mumbai to northern suburbs like Thane (home to Piramal Vaikunth). While buyers seeking a luxurious 2bhk flat in Mumbai are considering Piramal Mahalaxmi, value-conscious buyers shopping for a 1 bhk flat in Mumbai’s Metropolitan Region are finding Piramal Vaikunth at Thane well within their budget. 

Delhi-NCR

According to news reports, the pandemic has caused housing prices in Delhi to tumble by 10-15%. This is good news for home-buyers planning to invest in upscale Delhi localities like Dwarka, Shanti Niketan, Vasant Vihar, etc.  

Compared to other cities, residential prices in Delhi and the National Capital Region (comprising Gurugram, Faridabad, Noida, Ghaziabad and other localities), have grown slowly over the years. This is partly due to the abundant land and housing supply in NCR.

However, Delhi and Gurugram also boast some of the most expensive neighbourhoods in the Indian real estate market—like Lutyens’ Delhi, Greater Kailash, and Golf Course Road. This combination of dignified old enclaves, swanky malls and offices, some of the country’s finest healthcare facilities, and an enviable Metro network, makes Delhi-NCR one of India’s top end-user markets even in these challenging times.

Other factors that augur well for value appreciation in Delhi-NCR include the Metro’s expansion to Greater Noida, Ghaziabad and Jewar; the announcement of a Film City in Noida, and the upcoming Jewar International Airport, according to 99acres.

Bengaluru

Bengaluru is one of the world’s largest IT clusters. It also has more colleges than any other city. These factors contribute to sustained demand for worker and student housing in the Garden City all year round.

The above would also explain why home prices in Bengaluru have been less affected by the slowdown. In fact, the industry body CREDAI says city-based developers are hiking prices across segments to compensate for input costs and labour shortages during the pandemic.

The demand for residential property in Bengaluru has been assisted by low bank interest rates. While stamp duty on new purchases has also been slashed by the state government, it will only benefit people buying flats costing up to Rs.35 lakh, and not higher-end investors.

Compared to Mumbai and New Delhi, Bengaluru ranks lower as an investment destination in PWC’s Asia-Pacific Real Estate Outlook for 2020, owing to issues like chaotic traffic, patchy provision of utilities, and a rising pollution problem. However, Knight Frank adds that the construction of additional Metro extensions and lines by 2025, new ring roads, and a suburban rail network will help unlock residential investment opportunities in areas like Whitefield, Electronic City, Kogilu, Hoskote, Yeshwantpur, and others.

Chennai

The capital of Tamil Nadu is known for its flourishing IT and automobile industries. Beyond that, it is known for being a food and culture connoisseur’s delight.

Chennai is an affordable residential destination compared to other metros. Average home prices have only increased marginally in the last decade. And with the pandemic further bringing down prices, end-user buyers eyeing a home in the city can avail of various developer incentives, and the low interest rates prevailing today. 

Some of the most in-demand localities in Chennai are located in its southern and western regions, close to IT, auto, and manufacturing hubs. These localities include Adyar, Velachery, Thoraipakkam, and Avadi. Intra-city connectivity is also expected to grow with the launch of Chennai’s monorail project, the Metro Corridor 3 and 5, and multiple ring road projects that will benefit the upcoming North Chennai housing market.   

Final assessment

Every metro has its pros and cons. However, with its sustained dominance of the financial landscape and ongoing infrastructural makeover, Mumbai is a great proposition for those seeking capital appreciation through property investment. Just make sure to go for a trusted developer like Piramal Realty, which is behind some of the finest developments in the MMR region, including the uber-genteel Piramal Mahalaxmi and the idyllic Piramal Vaikunth.

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Team Piramal Realty
Founded in 2012, Piramal Realty, the real estate development arm of Piramal Group is one of India's leading developers with 17 mn sq. ft of residential and commercial under development in and around Mumbai. In 2015, Warburg Pincus and Goldman Sachs two of the world's most respected private equity investors invested $235 million dollars for a minority stake in the company. Piramal Realty aims to be the gold standard in design, quality, safety and customer centricity in both residential and commercial real estate. Piramal Realty's developments, while being cutting edge and contemporary, focus on embracing a more intuitive definition of luxury, which celebrates nature, greenery, space, light, ventilation, art, culture and community living.

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