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23 October 2018 - 14:00, by , in Property Trends, No comments

The government has taken several measures to make home buying a reality for all. The smart city push by the government is certainly a good news for home buyers. The construction completion deadline for construction to get tax breaks has been extended from three years to five years. In addition the tax benefit for buying a house has been given an additional deduction of INR 50000 under section 80EE. This benefit is currently offered to first time home buyers with a home loan of up to INR 35 lakhs for a house of maximum value of INR 50 lakhs. The metro cities have very limited to no option in this ticket size however, tier II cities offer a wide variety of homes available in smaller price brackets. The Smart City Mission of the government seeks to develop these tier II cities to equip them with modern infrastructure to bring them at par with the developed cities. A smart city boasts of features like adequate water supply, assured electricity, sanitation including solid waste management, efficient urban mobility and public transport, good governance, safe and secure environment for citizens especially women, children and senior citizens, health and education, sustainable environment, robust IT connectivity and last but not the least affordable housing. As the government takes on to develop 100 cities under the Smart Cities Mission, they present ample investment opportunity for future growth.

The following are some of the most promising destinations in terms of end usage as well as potential for price appreciation:

Bhubaneswar and Cuttack

These twin cities are the fastest growing IT and educational hubs in the east. This progress has given a push to real estate advancement. The real estate market in these cities is very well regulated as most of the land is owned by the government. Private players in this segment are relatively recent entrants. New developments are propelled by Infocity 1 and KIIT’s upcoming university. Independent bungalows and duplexes are more popular than apartments in these cities.

Growth Drivers:

Upcoming Commercial Projects: DLF and Unitech are launching Cybercity and Unitech One.

Six Lane Highway (NH-5): As a part of the golden quadrilateral project, six lane highway is underway. This would help in ease of transportation within the city and also improve connectivity to other parts of the country.

Kalinga Nagar Industrial Complex: This 13,000 acre complex has generated an interest in many industries that are keen on getting space in this development.

SEZ: Paradip SEZ and pharma SEZ are being set up.

Visakhapatnam

Visakhapatnam, also known as Vizag,is the commercial hub of the state of Andhra Pradesh. It is the state’s largest city in terms of area as well as population. It boasts of fast growing IT industry and strong infrastructural development that makes for attractive real estate investments. Depending on different areas, Vizag offers residential properties in ticket sizes ranging from INR 50 lakhs to 1 crore.

Growth Drivers:

Visakhapatnam-Chennai Industrial Corridor: This corridor is expected to be the Silicon Valley of India. The project anchored on an 800-km segment of NH 16 has Visakhapatnam as one of the four proposed industrial nodes around which the project plans infrastructure development. Industrial development and IT growth in and around the city would create job opportunities and foster demand for residential real estate.

Visakhapatnam Metro Rail: The first phase of the Vizag Metro Rail (VMR) is expected to be completed by December 2018. Corridor-1 proposes to cover a stretch of 22.28 km from Madhurwada to NAD junction covering 19 stations.

Chennai

The capital city of Tamil Nadu is predominantly a commercial market and is driven by end users. South and West parts host a large number of IT and financial services companies. The focus of the state government is on providing excellent road connectivity to help in developing this region.

Growth Drivers:

Outer Ring Road II: The six lane highway will connect NH-205 with NH-5 and TPP Road at Minjur.

Chennai Metro: Corridor I will connect the international airport to central Chennai. Corridor II will carry the heavy traffic of the city.

Mass Rapid Transit System: The elevated railway line will seamlessly connect the metro and MRTS lines.

Chennai Monorail: The 57 km Phase-I will constitute three elevated corridors. The first from Vandalur to Velachery (23 km) will improve connectivity for Vandalur and Tambaram with the city centre. Corridor two between Poonamallee and Kathipara (16 km) will connect west Chennai via Porur. The third from Poonamallee to Vadapalani via Valasarawakkam (18 km) will enhance the connectivity of Porur.

Coimbatore

With its burgeoning textile and spinning industry, Coimbatore has earned the title of being the ‘Manchester of South India’. The city’s activities have diversified beyond textiles to include general engineering, automobile parts manufacturing and IT industry. Real Estate development in Coimbatore have primarily been driven by small commercial developments, offices of local businesses, high street retail and individual houses.

Growth Drivers:

Gandhipuram flyover: The two tier flyover will ease the load of traffic in busy Gandhipuram.

Ring Road: Starts at South India Textile Research Association (SITRA) Junction on Avinashi Road and passes through other upcoming residential areas before ending at Mettupalayam Road. Avinashi Road is where the Coimbatore airport is.

Western Bypass: To run from Kangeyampalayam to Mettupalayam, the proposed bypass is expected to ease traffic by diverting heavy vehicles from Palakkad.

Eastern Bypass: Provides connectivity between the major arterial roads such as Trichy Road, Avinashi Road, etc.

Airport expansion: Land acquisition underway to increase capacity.

Bus Rapid Transit System: The proposed 18.6 km long corridor will start on Avinashi Road and end on Mettupalayam Road.

Kochi

Apart from being on the government’s list of smart cities, Kochi is also on the map of many new IT businesses. Developments such as privatisation of international airport and upgradation of the sea port have improved the real estate prospects of the city. Residential real estate of the city is mostly driven by NRIs. Only 30 percent of the end users are locals. The city has seen massive infrastructural development.

Growth Drivers:

Vallarpadam International Container Trans-shipment Terminal: The project will make this port city the trans-shipment hub of the Indian peninsula.

Kochi Metro: KMRL has proposed an elevated route spanning 25.2 km from Aluva to Petta, with 23 stations.

Industrial corridors: The Kochi-Coimbatore and Kochi-Kasaragod industrial corridors are expected to take-off soon. The goal of the projects is to double employment, industrial output and exports within five years.

IT SEZ: The under-construction project is expected to create over 90,000 jobs. SmartCity Kochi has located approximately 12 km from downtown Kochi and 22 km from the Cochin International Airport.

Oceanarium: Conceived as a tourism and marine research facility to tap the tourism potential of the state, the underwater aquarium in Puthuvypeen Island in Kochi will be the first of its kind in India.

Pune

Proximity to Mumbai and a thriving education, engineering, automobile and IT sector have accelerated real estate activity. The Mumbai-Pune Expressway has made Pune a much sought-after location for out-of-town investors, while year-round good weather makes it a preferred destination for homebuyers. Pune caters to end users with various ticket sizes ranging from INR 15 to 30 lakhs in the affordable section to INR 2.5 crore in the luxury and premium section.

Growth Drivers:

Metro Rail: Pune Metro Rail Corridor I, connecting Pimpri-Chinchwad, Shivajinagar and Swargate, will enhance connectivity between north and south Pune, once ready. The second corridor, between Ramwadi, Pune station and Vanaz, will solve the troublesome traffic issues on the east-west route. Both passageways are expected to be completed by 2020.

Bus Rapid Transit System: With over 600 special buses, the Sangamwadi-Vishrantwadi Corridor and the Sangvi-Kiwale Corridor in Pimpri Chinchwad became operational last year. Routes between Nashik Phata and Wakad, Nigdi and Dapodi and Nagar Road will be completed this year.

International airport: The Lohegaon airport cannot serve international traffic of more than 3 to 4 flights a day. Hence, a new international airport is being developed 14 km west of Rajgurunagar, which would be connected by the Metro.

Ahmedabad

This city is Gujarat’s most significant business and trading hub. Textile, automotive, engineering and chemical are key industries driving growth. A surge in employment opportunities has attracted talent from across the country and turned the investor-driven real estate market into an end-user-driven market.

Growth Drivers:

GIFT City: The Gujarat International Finance Tec-City or GIFT, an under-construction central business district between Ahmedabad and Gandhinagar, promises to offer global firms world-class infrastructure, facilities and the most exceptional quality of life with integrated townships.

Sardar Patel Outer Ring Road: The outer ring road is already operational. It has mainly benefitted peripheral locations of the city.

Metro rail project: This phase will connect affordable residential locations like Vastral in the east to the city centre and west, thereby reducing the effective travel time between the most densely populated areas.

Indore

Indore is one of the fastest developing cities of Madhya Pradesh. The city has a strong pharma and auto industry presence, which also influences its real estate market.

Growth Drivers:

BRTS: The Indore Bus Rapid Transit System was started in 2007, flagged its first pilot corridor along AB Road in 2013, boosting property prices in the vicinity.

Super corridor: This 250-ft-wide road connecting the airport with Major Road (MR) 10 is where Infosys and TCS are setting up their campuses, making it an emerging location for real estate development. Areas along the corridor have been witnessing large-scale residential developments.

Major Road (MR) 12: This new road is expected to ease the traffic on MR 10 and people coming from Bhopal can directly go to Indore airport without entering the city. The connecting Ujjain Road to Bypass via AB Road will also help regulate traffic.

DMIC: About 1% of the influence area of Delhi-Mumbai Industrial Corridor passes through Madhya Pradesh, covering Neemuch, Mandsaur, Ratlam, Dhar and Jhabua, which are all close to Indore. This will impact the residential market.

 

See Also: Investing In Later Phases of a Project

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