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Posted at: May 9, 2015, 12:32 AM; last updated: May 8, 2015, 9:28 PM (IST)

India’s Silicon Valley is top realty destination

Influx of IT and ITES companies and professionals and infrastructure projects have made Bengaluru the country’s top real estate destination in the past year. This was revealed in a report released by PropEquity, India’s leading real estate data, research and analytics firm on Thursday, While Bengaluru emerged as the number one destination in most of the parameters evaluated on for studying India’s top real estate destinations, Gurgaon dropped to number 10 position as the North region is marred by project delays, expensive properties and a demand-and-supply mismatch.

Not just Bangalore, this latest report by PropEquity puts the Southern region of India at the top as three out of the top four cities are Bangalore (1), Chennai (3) & Hyderabad (4). These cities have topped over 50 per cent of the parameters evaluated in the research.

Bangalore has emerged as the best among the top 14 cities in India and has also ranked number 1 on 4 out of the 10 parameters evaluated ( i.e. size of the market, CAGR of absorption and total unsold inventory to yearly absorption ratio).

Pune has come a close second and has been solely responsible for helping the western region gain the second spot.

However, the NCR region has failed to make its mark on any of the parameters evaluated and has low regional as well as city rankings.

“Noida, Greater Noida, Ghaziabad and Faridbad on the basis of the evaluated parameters are not in top 10 cities of India, only Gurgaon continues to remain on the list at the 10th position. On the other hand Southern region has performed relatively better across all the paremeters and we expect this trend to continue going forward,” Samir Jasuja, CEO and Founder of PropEquity said.

Ten key parameters taken into account to generate the rankings included the price, supply, absorption, inventory, and new launch trends. Study has also looked at execution delays and the size of the market in value terms.

All NCR cities occupy the bottom rankings, depicting the weakness in the region.

The base indicators used in the report are: 1. Projects Launched 2. Projects offered possession 3. Units launched 4. Units absorbed 5. Total unsold stock 6. Launch price increase 7. Inventory overhang 8. Size of market

Mumbai, which ranked first five years ago, has now slipped to the eighth position, while Bengaluru, which did not even figure in the first five cities, has climbed to the top.

Overall, the city which has fallen the most in rankings is Noida (from 4th to 11th) and Mumbai (from 1st to 8th), while the city which climbed the most is Hyderabad (from 10th to 4th).

In terms of regions, the southern region, which ranked third has overtaken the northern region in regional rankings. — TNS

NCR loses sheen

NCR’s performance has been below par in all the key parameters that affect the real estate scenario in India today.

  • Northern real estate developers have been deeply impacted by the slowing economy and have taken the major brunt of the impact.
  • The primary reason why NCR has suffered the most is because there has been a flight of investors and over 50 per cent of the sales in NCR have been investor driven since past 5-7 years owing to the exponential returns the market gave between 2009 – 2012.
  • Cities such as Gurgaon and Greater Noida have witnessed unprecedented sales in residential asset class, but the related infrastructure development has not materialised as per expectations. Due to this the social infrastructure has also not caught up making these areas inhabitable. Key example of these micro markets being Dwarka Expressway, New Gurgaon Region, Yamuna Expressway & Noida Extension.
  • Developers have over stretched themselves by launching huge townships and large sized projects, which were difficult to execute and required significant funding. With paucity on bank lending on these projects, the construction pace slowed down to alarming levels.
  • Prices in these regions went up very quickly making it out of reach of many end-user buyers.
  • Demand and supply was mismatched in the NCR region as a whopping over 1.5 lakh units were launched just in 2011-2012.
The top 10 

  • Bengaluru nPune 
  • Chennai nHyderabad
  • Ahmedabad
  • Thane
  • Kolkata
  • Mumbai 
  • Navi Mumbai nGurgaon. 
Noida, Ghaziabad, Greater Noida, and Faridabad are at 11th, 12th, 13th and 14th position, respectively.

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