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Mumbai’s Madh-Marve and Ulwe have topped the chart of 11 investment destinations with prices in these micro markets expected to go up by 94 per cent and 70 per cent, respectively, by 2020, according to the second edition of Knight Frank’s Residential Investment Advisory Report. 

The average price in these micro markets are in the range of Rs 13,500 per sq ft and Rs 6,000 per sq ft as of 2015, which will go up to Rs 26,200 and Rs 10,200 respectively in the next five years, the report forecasts.

The key drivers for the Mumbai Metropolitan Region (MMR) will be employment, an arterial road network and the proposed suburban railway networks (metro and monorail), the Coastal Freeway and the trans-harbour link, the report said. It added that the residential market demand in each of the selected destinations will be driven primarily by two factors - employment generation and infrastructure development.

Pune’s Viman Nagar features at third position with prices pegged to go up by 63 per cent while its peer Vishrantwadi will see appreciation of 55 per cent. 

The report notes that locations such as as Hinjewadi, Wakad, Tathawade and Ravet failed to perform as per the estimated price appreciation three years ago, mainly due to the ample availability of vacant land in the vicinity. Relatively, they have shown better performance compared with other locations in Pune. 

Even though NCR has seen the worst impact of slowdown in the sector, two of its micro markets New Gurgaon (Sector 81-95) and Golf Course Extension Road have featured on the list with prices likely to go up by 47 per cent and 42 per cent, respectively.

The report notes that NCR’s ranking has come down drastically compared with 2012 due to the overall real estate scenario bottoming out.

However, it adds that Delhi will continue to be a favourite among office occupiers but with limited scope for new supply, prices in the area will remain unaffordable. Gurgaon, which accounts for 53 per cent of the total office stock in NCR, will witness approximately 13 million sq ft of incremental office space by 2018.

Hyderabad has made its debut on the list following stability in the region. Puppalaguda–Narsingi has emerged as one of the potential destinations where prices are expected to go up by 41 per cent.

Here is a look at markets which will see highest price appreciation

IT city Bengaluru has thrown up two potential destinations with Panathur–Varthur from East Bengaluru and Thanisandra from North likely to see appreciation of 61 and 55 per cent respectively over the next five years.

South Bengaluru witnessed a slackened price growth due to severe traffic congestion, a lack of substantial incremental employment opportunities and lack of infrastructure development, the report added. 

Dr Samantak Das, chief economist and national director, research, Knight Frank, said real estate is reeling under tremendous pressure for the last couple of years with price appreciation in most the cities not even exceeding inflation. “In the next five years, we anticipate the residential price growth to remain muted on the back of delayed economic reforms, subdued demand and a lack of consumer confidence in the completion and delivery of projects.”

He, however, added there are ample opportunities to earn healthy returns even today as these micro markets will provide maximum appreciation in the range of 41 per cent to 94 per cent in the coming five years.

Mudassir Zaidi, national director, residential, Knight Frank, said, “Real estate industry is cyclical in nature and we anticipate that we are at the end of the cycle of slow-down. The wave of positive sentiments is quite evident and the recovery is getting stronger.”

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