Being the host of India’s financial hub Mumbai, Maharashtra witnessed fastest urbanisation in the country. Despite skyrocketing land prices and increasing cost of construction materials, Maharashtra doesn’t lose its sheen in the realty sector.The real estate in Maharashtra has thrived on its industrial growth, developing in every segment- commercial spaces, residential apartments and condominiums, retail malls, hotels or special economic zones. Maharashtra is considered as one of the most investment worthy states of India. The state includes many tier-2 cities has which are also emerging as Industrial hubs of the country.
“Maharashtra represents a unique market model – an amalgam of high-octane business and, as a result, considerable residential and commercial real estate activity. The economic dynamics in this state are firmly entrenched. The cities of Mumbai, Pune and Nasik serve as suitable illustrators of how the real estate market in Maharashtra is performing,” stated Anuj Puri, Chairman and Country Head, Jones Lang LaSalle India.
Most preferred state for FDIThe NRIs mostly prefer Maharashtra for their real estate investments. The IT giants across the world are targeting Maharashtra to set up their offices in India. Investment in any part of the state can assure you good returns, experts say.“From the point of view of the foreign investors in real estate, Maharashtra scores heavily due to better connectivity, availability of beaches, mountains and planes for the developers to offer a wide variety of products, reasonably good weather and law and order situation, cosmopolitan culture and transparent system of land transactions,” says Vivek Shesh, CEO, Sairung Developers.
Maharashtra attracted 17 times more FDI than Gujarat in 2012-13. The FDI flow into Maharashtra reached ` 47, 359 crore in 2012-13 from ` 44, 664 crore in 2011-12.
The economic survey report tabled in the state legislature has revealed that the state’s growth rate remained stagnant in 2012-13, estimated at 7.1 per cent, the same as the earlier fiscal year.
Commenting on the growth rate of Maharashtra, Mr Shesh said, “The real estate growth in different parts of the state would obviously differ from place to place in line with the development taking place in the region. In Western Maharashtra which includes districts like Pune, Nashik, Solapur, Satara etc., the growth in the real estate investments ranges from 20-40 per cent y-o-y when viewed over a period of more than 5 years. There are few other regions around Nagpur which are showing a lot of potential, though sometimes delayed projects could have a dampening effect on the prices.”
Hottest real estate destinations in MaharashtraThe most favourable real estate destinations in Maharashtra are:MumbaiMumbai is the financial capital of the India and has seen immense growth in the real estate in past few decades. Mumbai is the favourite destination for commercial real estate in India and is majorly favoured by the foreign companies.
Lately, Mumbai has been observing land crunch since past few years which is increasing the property prices in the Mumbai. “In Mumbai, affordable housing has become an elusive dream. Skyrocketing price appreciation in the Mumbai Metropolitan Region (MMR) has boosted residential property prices almost completely out of the reach of the common man. It is definitely not an investor’s market right now, owing to the generalized slowdown,” added Mr Puri.
According to privately-held commercial real estate services firm Cushman & Wakefield, in Mumbai, the capital values have remained stable during the fourth quarter compared to the last year. Capital value appreciation in the high-end segment has been the highest in prime locations of South (9 per cent), South Central Mumbai (10 per cent) and Western Suburbs Prime (17 per cent). Infrastructure projects like the monorail and the eastern freeway which is already operational has provided impetus to locations such as Wadala and Chembur.
“In Mumbai, overall launches have remained healthy during the year and have increased by 6 per cent to 30,800 units compared to 2012,” the firm said.
If Mumbai does see a correction in prices – which is very likely in the near future – its residential real estate market will pick up pace again.
PunePune is becoming increasingly integral to the real estate sector of Maharashtra and the country at large. There are good reasons why Pune has emerged as one of the most aspired-for residential destinations in India today. The fact that it is so well connected to Mumbai is only the tip of the iceberg.
“Pune’s residential property market has maintained its momentum even in a challenging economic environment. Various research agencies have confirmed that Pune has prevailed as one of the best-performing residential real estate markets over the past two years,” shares Kishor Pate, CMD, Amit Enterprises Housing Ltd.
In Pune, the number of launches has declined by 20 per cent compared to last year. The high-end segment contributed to more than 20 per cent (22.86 per cent) of the launch activity during the year as compared to just 6 per cent in 2012.
Mr Pote reveals, “It is true that residential sales have slowed down even in Pune. However, it is also a fact that they have remained healthy enough to sustain the viability of the city’s real estate market. Thanks to the sustained viability of the Pune property market, it will not see a price correction.”
Pune’s pace of urban growth has been unparalleled, with the number of people migrating into the city from all over the country increasing every year.
NagpurNagpur is located in the centre of India and it is well connected with major cities of India. The development of the Multi-model International Cargo Hub and Airport at Nagpur (MIHAN) will increase the demand for the properties in Nagpur. Nagpur is one of the major Industrial sectors of the India and many IT companies are planning to set up their offices in the city. This will also increase demand in the real estate of the city. Property demand in the properties witnessed to be very high in the past few years.
Nasik “Nasik’s residential market grew at a leisurely pace until about 2006, after which it suddenly began showing significant annual appreciation rates. Nasik had now emerged as a realistic alternative destination for buyers who are discouraged by the residential property rates in Mumbai and Pune. It offers low entry costs and simultaneously reasonably attractive appreciation rates. Another reason is the increasing presence of the IT/ITES sector in Nasik. Of late, Nasik has been displaying very healthy appreciation rates,” says Mr Puri.
The real estate growth and property rates in Nashik have been stable. There are no fluctuations in demand and supply, the situation is balanced. Despite the generalised slowdown, Maharashtra continues to be one of the foremost contenders in India’s real estate sweepstakes. Maharashtra will remain the investor’s safest bet, as the industrial climate rests on India’s most qualified, professional and committed workforce.
Positive outlookMumbai is one of the largest real estate markets with land prices higher than those in other countries so the problems to deal with are many. “We need more rule based decision making in Maharashtra and planned development of townships outside the city. We want more integrated industrial townships that promote walk to work, an inclusive housing culture, which mandates for 20 per cent of large housing projects to be developed for EWS segment to promote affordable housing. Work has begun on the new development plan for Mumbai, which will soon be available to the public for their suggestions. We are also training town planners and we have proposed to start an institute of town planning in Pune,” commented Maharashtra Chief Minister Prithviraj Chavan while talking at the 10th international real estate summit organised by FICCI in Mumbai recently.
He also informed, “Many infrastructure projects like Eastern Freeway and Santacruz-Chembur cross road were launched; Metro and Monorail will also be commissioned soon. The land acquisition issue for the Navi Mumbai airport has been solved. In a land-for-land deal and cashless compensation, the PAPs will be housed in a new township called Pushpak Nagar to be developed by CIDCO. A lot of projects like the coastal road, the third metro from Colaba to SEEPZ are on card.”