Real estate evolving in smaller cities
Despite the real estate market in small cities and towns witnessing a revival, developers are concerned as these areas had faced the maximum heat of economic slowdown.
Astrum Homes was planning to develop mid-income housing projects in smaller cities in 2013. Now the company has extended its launches by 2015. The company was set up by promoters of Fire Capital Fund and a few US-based professionals. The company aims to build 32,000 homes by 2015. It will launch a 700 home gated community project in Mysore in 2013. It is also planning to tie up land deals for seven projects.
In 2012, on one hand, the big cities got support from investors during economic slowdown and on the other hand, the small cities got the worst hit during same time period. There was a good demand but no investments were seen.
Those developers who ventured during 2010 and 2011 with large and multiple projects withdrew and focused on their other projects in large cities.
The small Indian cities offer steady demand for low-priced homes, quick land acquisition and project approvals. Thus, now after revival many real estate developers are getting attracted to the real estate market of small cities.
Some experts say that real estate markets of these small cities are still to be developed fully. A healthy growth can be seen in coming five years.
Recently, Value and Budget Housing Corp. Pvt. Ltd entered northern region by launching a project in Bhiwadi. It is also planning to launch more residential projects in the same area.
Owing to faster rate of project approval in these cities, the company is exploring opportunities in smaller property markets. It is considering cities like Indore and Ahmedabad to look upon when the demand is good.
As per the property advisory Jones Lang LaSalle India (JLL), the rapid urbanisation in the country will result in small cities to grow as metropolitan clusters. The small town and cities are witnessing developments like expansion of roads, flyovers and open areas.
Some identified potential metropolitan clusters by JLL include Ahmedabad-Surat-Vadodara; Kochi-Coimbatore-Trivandrum; Jaipur-Jodhpur; Visakhapatnam-Vijaywada; and Chandigarh-Ludhiana. The company believes that these corridors will show immense growth in the coming 10 years.
Some developers stated that the prices in these small cities will not increase as a result of speculation which is very common in big cities.This is because the maximum stock is not bought by investors and by actual users.
The Delhi-based firm Parsvnath Developers Ltd is planning to launch few projects in smaller cities after eight months.
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