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In India’s property market, there are several locations that are more promising and are coming up better than their parent metro cities. We have seen this trend in the past, with areas in the National Capital Region (NCR) performing better than Delhi, and Navi Mumbai outperforming Mumbai’s growth.
With the existing infrastructure, there is no way that the metros can take more load, points out Shoeb Sayed, CEO of Motilal Oswal Property Advisors Ltd. “So, there will be a spill-over effect on neighbouring and emerging cities. The cities that can handle this load will be those with good road and rail network, an efficient governing body and well laid out social infrastructure,” Sayed explains.
Emerging locations close to the metro cities
With prime areas across metro cities becoming unaffordable, home buyers tend to look for newer/upcoming areas. Moreover, such neighbourhoods along the peripheral areas, provide buyers with more space, additional amenities and accelerated capital appreciation over a relatively short period of time.
“The increase in urban population over the last few years, has fuelled the development of areas along the periphery of metropolitan cities. Improved connectivity, affordability, development of social infrastructure and the growth of business districts outside of metros, have further enhanced the appeal of these areas,” explains Shubika Bilkha, business head, REMI (The Real Estate Management Institute).
Prime emerging locations near metro cities
Mumbai (Emerging location: Mira Road-Virar, Thane and Navi Mumbai)
These three regions are well-connected to Mumbai, through rail and road networks. With physical and social infrastructure improving, property rates are expected to jump by 5% to 10%, annually.
Delhi NCR (Emerging location: Ghaziabad and New Gurgaon)
Infrastructure developments, like the Delhi-Mumbai Industrial Corridor (DMIC), peripheral expressways and the government’s initiative to widen the NH-24 on the way to Ghaziabad, have been instrumental in making this area a popular investment destination.
Pune (Emerging location: Hinjawadi and Punawale)
The new airport road in Viman Nagar and areas along the Mumbai-Pune Expressway that are close to the industrial units located towards the north of the city, such as Punavale and Hinjewadi, continue to witness growth.
Kolkata (Emerging location: Rajarhat and Barasat)
Rajarhat New Town is a recently established township, in close proximity to the international airport. It enjoys good connectivity by road, to the northern and southern areas of the city. Barasat, located towards the north of the city, has witnessed considerable improvement in infrastructure and is home to well-known educational institutions and hospitals.
Bengaluru (Emerging location: Devanahalli, Whitefield, Electronic City and Outer Ring Road)
These regions have developed, owing to the growth of the IT/ITeS sector in Bengaluru. While Whitefield continues to be a prominent rental market for IT professionals, Devanahalli (located 40 kms to the north-east of Bengaluru) has emerged as an IT hub (with two IT parks) and is also home to an aerospace park, a science park, as well as the proposed financial city.
Things to keep in mind
“While assessing new areas, it is important to understand the short-term and long-term increase in property values. While newer/upcoming areas have a higher potential for short-term capital appreciation, these investments also involve higher risk. On the other hand, certain prime areas in metros have typically been lower risk investment destinations but also offer lower short-term capital appreciation,” Bilkha elaborates.
Key factors to consider, before buying a home in an emerging location
- The individual buyer’s family size/requirement.
- The area’s connectivity via road/rail.
- The availability of basic amenities, such as running water, 24/7 electricity.
- The region’s proximity to important commercial areas.
- The presence of educational institutions and hospitals.
- Easy accessibility to key recreational centres and entertainment hubs (grocery stores, malls, cinemas, etc.).