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Metropolitan cities’ real estate markets are no longer considered a safe haven for property investment. With a growing demand for a reduction in property rates, the chances of investing in metros are getting slim. It is becoming increasingly pertinent to explore destinations away from major cities, and invest in upcoming areas.
Property prices in the metros are beyond the reach of the common man. However, areas beyond the cities offer larger homes with more affordable rates. Investors should think beyond metros because of lower prices, rapidly developing infrastructure, improved connectivity and the high potential for appreciation.
Evolving locations for realty investment
“Realty locations outside the metros, have developed greatly in the last few years because of rapid immigration into metros like Mumbai, Chennai, Delhi and Bengaluru,” points out Vivekanand Babu, president – sales & marketing, VBHC Value Homes Pvt Ltd. “Immigration from tier-2 cities for employment, has resulted in high prices, thus, pushing development to the outskirts of the city. Also, the development of large factories, manufacturing units and IT campuses in places like Bhiwadi (Rajasthan), Oragadam (Tamil Nadu), Anekal (Karnataka), etc., has created a high demand in the micro-markets,” he says.
Experts suggest that the areas beyond the metros of Mumbai (Navi Mumbai/Thane/Panvel), Delhi (Noida/Gurgaon/Ghaziabad), Bengaluru (Mysore/Hubli/Dharwad), have grown as popular destinations, providing the same amenities/infrastructure/connectivity, etc. Babu recommends the following upcoming markets: Mysore Road, Electronic City area and Whitefield (Bengaluru); Bhiwadi, Noida and Neemrana (Delhi); and Palghar and Vasind (Mumbai).
Benefits of investing beyond metros
- Low property prices and less capital requirement.
- Higher return on investment.
- Low maintenance charges and other recurring expenses.
- Peaceful and clean environment.
Key concerns of investing beyond metros
“Metros are already developed and the key concern for most investors is whether the areas beyond metros will develop similarly and whether, their return on investment will be optimised compared to a major city,” states Amol Tavildar, CEO, Dajikaka Gadgil Developers Pvt Ltd.
See also: Emerging locations in the top 5 metros
Risks of investing beyond metros
- Lack of social and physical infrastructure.
- Rental return may not be attractive.
- Less liquidity in comparison to metro properties.
- Vulnerable to the local legal and political issues.
- Lack of property options from reputed builders.
- Delivery concerns.
- Status of legal clearances and land title with the developer.
- Blueprints of all plans.
- Quality of previously constructed projects by the same developer.
- Association of project with the financial institution or banks.
- Check the availability of basic infrastructure and public amenities.
- Never invest in an unknown location.
It is important to do some ground research by visiting the location and conduct due diligence when buying a property in an off-metro project. Gauge the future prospects of the property on various parameters such as infrastructure, upcoming commercial development and distance from the airport, and other public amenities. Consider the rare possibility that the location, may never take off.