Real estate in India has been experiencing dynamic transformation in recent times with a series of regulatory policies being brought about by the government. Reforms like RERA, demonetisation, and GST have changed the landscape of real estate in the country.
Even as these changes were being ushered in, South India continued to maintain momentum in real estate and has been a quiet crusader. Cities like Bangalore, Chennai, and Hyderabad are now part of the global real estate map. The new policies implemented by the government have created structural changes in the Indian economy and influenced by this, southern cities have become the focal point for future real estate developments.
By limiting new launches, focussing on completing delayed projects and aiming for projects that match consumer demand, housing performance has been relatively good in the southern cities. This approach has been in direct contrast to markets like Delhi NCR and Mumbai, where the developers are facing the challenge of enormous inventory pile up, contrary to the situation in South India.
As per a recent report, Bangalore and Hyderabad should be Asia’s fastest and third fastest-growing cities, respectively, over 2020-24. Bangalore should also achieve average annual real GDP growth of 9.9% over 2020-2024 – far above aggregate growth for India of 6.8%and average growth for Asian cities of 3.9% over the same period.
Why South India?
Presence of robust infrastructure : Public transport and connectivity are good in the southern cities and are being made robust further through multiple infrastructure projects. Metro connectivity will completely transform the way people travel and being pollution-free, it will change the real estate dynamics positively.
In Bangalore, the planned key developments are the completion of the metro with lines covering Whitefield, Bidadi, Bangalore International Airport and Bannerghatta region. A vast suburban rail system has also been planned around Bangalore apart from the construction of the Peripheral Ring Road.
Similarly, a 3-deck elevated corridor is all set to give Chennai’s Old Mahabalipuram Road (OMR) a makeover as the government is planning a multi-deck elevated transport corridor under two phases to decongest the IT Expressway. The developments have compelled many residents to relocate from old residential zones to the new residential hotspots like OMR and ECR in Chennai.
Strong IT and Start-up growth: The astounding growth of the information technology industry, multinationals and public industries in southern India is to be taken note of. Bangalore, Chennai and Hyderabad have emerged as the main arm of the outsourcing business for the US, UK, and Europe.
With more foreign investors looking to establish their IT back offices in the prime locations of South India, the scope for corporate real estate is immensely high.
Start-ups too have emerged very strongly in this region with Bangalore becoming the start-up capital of India. Bangalore, Chennai and Hyderabad are among top 10 cities for start-ups in the country, which now has over 20,000 registered start-ups.
Availability of land at reasonable pricing: The vast availability of land at reasonable prices in the southern metros as compared to Mumbai and Delhi has led to higher demand for luxury housing. The presence of a high number of urban professionals both from within the cities and due to high migration from other cities seeking enhanced prospects has created a significant demand for luxury housing.
High retail growth: Metro cities in the south have also seen a sharp rise in retail and commercial growth. A slew of supermarkets, malls and leading retail chains has emerged to cater to the rising demand. Millennials have been the driving force behind this change as they seek a superior lifestyle. To cater to their pristine tastes, international and premium Indian brands, among others have made their presence felt in the South.
Social infrastructure: South India has always been at the forefront of health and education. Some of the biggest brands in healthcare and the numerous colleges and universities of repute have their presence in Bangalore, Chennai and Hyderabad. Millennials and their families have been attracted to these cities due to the availability of a wide choice.
Increased Demand from NRIs: Owing to the vast presence of physical and social infrastructure, the on-time completion of real estate projects and good track record of developers, NRIs are also attracted to invest in the southern part of the country.
The overall NRI investment in the primary real estate market in India is estimated to grow to nearly $25 billion by 2022, and a good portion of this is expected to be invested in southern cities. Quick and high capital appreciation too makes the region an attractive destination for real estate investment. Also, the rupee hovers at levels that inspire NRIs to stick with their investment.
All said and done, Bangalore, Chennai, and Hyderabad are growing at a fast pace. A conducive investment climate, the presence of a dynamic professional class, a well-developed corporate ecosystem, and the rapid rise of co-working spaces have all brought sheen to real estate in South India, which will experience a further boom in the coming years.
This article is contributed by Neha Hiranandani, Director, House of Hiranandani.
The views expressed here are solely those of the author and do not necessarily represent or reflect the views of RoofandFloor.
The infrastructure development has always been phenomenal in South India .
Investing is an important part of life and everyone saves to invest for good and reap greater profits or at least creates security for themselves. North India is also very competitive throughout and has a lot of potentials. weather conditions are better which makes it all a perfect investment destination.
There is an interesting trend that has been noticed in Indian real estate market. In a market riddled by lack of demand from buyers, developers are seen launching luxury residential projects.
Resultantly, there has been an unexpected emergence of interest in the luxury residential segment which has come from non-resident Indian clienteles and buyers with deep pockets.
this is an amazing blog. yes, I very much agree with you. but still surprisingly 52% of people are showing interest to buy homes in south India
I strongly agree with the points of having a prime location and social infrastructure are the key factors for customers who are investing.
I just came across your blog post and must say that it’s a great piece of information that you have shared. Great article with very helpful information!
Very interesting Blog. Actually I accept your view on NRI’s investment.
Interesting reading! Thanks for sharing your information about buying home in Delhi.
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Interesting reading! Thanks for sharing your information on Real Estate in India.
Great article! Thank you for sharing this informative post, and looking forward to the latest one.
Wonderful!! This is such a informative blog.