Investing in Residential Estate? Is it worth?

New project launches in India’s nine key residential markets continued to show a decline, falling 44 per cent year-on-year in the period between October and December 2019, primarily on liquidity concerns.

While, on the other side the commercial real estate market of India in the year 2019 has seen increased investor focus. With the prices in the residential market stagnating, commercial properties have been lucrative because of the returns they offer.

Atleast the “Real insight Q3FY20”, a quarterly analysis of India’s nine key property markets by PropTiger DataLabs says so.

A lot of developers are now targeting the small retail investor who does not have the appetite to purchase large commercial offices and are therefore developing commercial projects that offer 350-1000 sq. ft. offices. A commercial asset today offers 1-2% more yield yearly than a residential asset.

Sales fell across cities

Housing sales in India’s nine key property markets fell 30 per cent annually during the October-December quarter despite the government launching several measures in the recent past to revive buyer sentiment.

Talking about Ahmedabad, the city observed a double-digit dip in total number of units sold. There was a decrease of 14% in the growth  of units sold when compared Quarter 3 on Year-on-Year basis and 8% decrease in Quarter to Quarter comparison.

Failed launches

Most of the new launches in most of the cities of India, couldn’t live up to the expectations. Kolkata and Gurugram saw almost 74-79% slump in the new launches.

The only launches which were successful were affordable launches. But, more than half of them came from Mumbai alone.

Marginal price appreciation

Average values of property increased by 13% year-over-year in Hyderabad, the highest increase among all the cities included in the report, while Gurugram and Ahmedabad registered 6% and 5% increase, respectively. 

In other cities, prices showed only nominal increases, between one and three per cent.

Why you should own a office than a co-work.. space?

Co-working spaces is very popular among the millennials these days. Their affordability makes them more attractive. Furnished & ready office does fuels productivity and creativity. However, like all businesses co-working spaces also face certain challenges. 

Data Privacy

The very objective of co-working spaces is to bring together variety of professionals, and work parallely. Yet, in this age of technology many businesses, especially large enterprises, have concerns about the integrity of their data.

With cyber-technology growing in leaps and bounds, businesses are worried about the safety of their information that their employees working out of co-working spaces are working on. Like, using a shared wifi network can prone their system to severe threat of data-theft. In addition, with different people working together, the businesses are wary of information leaks. It is a legitimate concern that factors in the decision making of our clients when they are trying to decide on a space to work from. It is quite a challenge to ensure data privacy, and co-working spaces must endeavor to provide a safe network to our clients to remedy this concern of theirs.

Competition

Providing basic amenities such as free wifi and unlimited access to refreshments is no longer enough. Untill and unless the operators are on their toes reinventing how they work, refurbishing interior design, reimagining strategies, the second-user of the space often gets space which literally looks like used. The need that the co-working spaces should constantly innovate is very high but hardly seen relevant from the perspective of an operator. 

Insurance

Spaces are an asset which need to be insured. This is an additional burden which can neither be transferred to the clients nor to the landlords. The first is usually because of the large turnover rate of the clients, and transferring their responsibility onto the landlord would only result in pushing upward the rental prices. Say a fire mishap broke up in the building who will take the responsibility of the loss?

Long term rentals, short term clients base

Co-working spaces sign long term rental leases with property owners for the sake of stability. The client base, on the other hand, sees a large churn-rate,  because of the nature of the co-working segment. The advantage of the co-working space to provide freedom in terms of choosing workspaces contradicts with their motto of getting long-term clientele leading to demand and supply mismatch.

Rental vs Ownership model

With the rental prices rising, mostly due to competition, the client has to take a decision as to which model would be more economical in the long term. Long term rentals were quite popular, but eventually companies felt that with the ownership model the operators have unlimited flexibility to innovate. Co-working spaces are no doubt proving that wrong up to some extent. But in the market companies wants to build their office their way by introducing build to suit customized solutions.

5 reasons, why Surat should be in your list of real estate investment

Indians, are always known worldwide for their smart choices when it comes to investment. And real estate market has always been a top choice of many of the smartest investors because of increasing prices, security of investment and awesome returns on investment. And as we put an eye on the western shore of India, specially Gujarat we come across few cities which are attracting high investments from government as well as private players. Cities like, Ahmedabad, Vadodara, Rajkot and Surat.

But of all these options available there is one city which have out-shined any investment options, and that city is Surat. And here we are going to give you five reasons. Yes, not one or two but total five reasons. Hence proving why Surat is one of the best or hottest real estate investment choice of the smart today.

  1. Surat is the city with high standards of living – Surat, known as the Diamond capital of the world, is one of the fastest growing cities now just in India but in whole World. And also, an average Surti earns almost double annually compared to an average Indian. Conferred with the “Best Urban City of India Award”, Surat is also one of the top Cleanest cities in India in Swachch Sarvekshan Surveys.
  2. Surat – The Manchester of the East – It is well known, as the second largest commercial centre in Gujarat and enjoys eight position in largest cities of India. Well Known for diamond processing and synthetic textile industries, WSJ (Wall Street Journal) once wrote that as per their research world’s 80% diamonds are processed in Surat alone.
  3. A Gem of Future – Whether be it the ambitious project of bullet train or DMIC (Delhi – Mumbai Industrial Corridor) or Diamond Bourse, Surat is always in the good books of the central governments. Each and every ambitious government project, whether be of state or centre, they always find Surat as one of the biggest benefactors of the same. Now, even Surat’s Airport as become an International Airport and has increased air connectivity to various major airports of the world.
  4. Demographically rich City – Surat enjoys rich demography as you can witness any caste, creed or religion living happily or working in the city. FYI, Surat enjoys almost 0% unemployment. Yes, its almost 0.18% only. Which means, more skilled, more laborious and more sharp people exist in the city.
  5. Surat has it all – Surat has all the necessary natural resources, labour and government backing, which are self-sufficient for the purpose of investing. Its world-class infrastructure and small-scale industries, especially the textile industry, has really made Surat one of the most preferred destinations for investing. Though several global investors have already invested in Surat, a lot more industries in Surat have tremendous potential which need to be explored.

Surat lies in close proximity to Mumbai which is a boon for traders and businessmen and boasts of top-class infrastructure and governmental support. Additionally, Surat is set to witness several path breaking infrastructural & business developments over the next few years which will lead to huge appreciation in values of investments made now.

Surat still has affordable property prices in comparison to several big cities in the country in spite of a steady rise in capital values owing to skyrocketing development.

Tips for choosing the right property for investment

Real estate is one of the most attractive avenues for investment. However, it is important to understand the market dynamics and choose the right property to ensure that your investment brings the expected return.

A popular investment asset, real estate, has witnessed tremendous growth in the last decade. This is the reason why Indians continue to find themselves attracted to the sector despite the complex nature of property investments. Experts advise that creating wealth through real estate investment requires a careful analysis of the market, options, preferred locations, and the merits and demerits associated with each. Selecting a property that is best suited to your needs is of vital importance for making a profit in the realty market.

Some key factors that need to be considered before choosing a property for investment are:

Purpose of investment

Before embarking on the search for a suitable property, an investor needs to ascertain his purpose for investment. Does he want regular rental income or is he more interested in capital gains? Price appreciation is the preferred route for long-term investors with greater risk appetite who tend to focus on developing locations as opposed to those looking for rental income who prefer areas with easy access to basic amenities.

Henceforth, projects like Homeland City comes with some unique proposition of Rent Guarantee, where they guarantee you of rent for your property, right from the day you get a possession from the builder.

Location

Location is the most critical factor to consider while investing in real estate. In fact, one of the famous real-estate agent, comments, “Areas enjoying sound infrastructure, such as those located near airports, prime-locations or markets, etc. will always yield higher rentals and price appreciation.” Those looking for rental investments should focus on areas already having good connectivity and social infrastructure, while long-term investors are better off exploring emerging corridors and city peripheries likely to get infrastructure boost in the near future.

Property segment

Investors also need to figure out which segment is the right fit for them based on their risk appetite, budget, and overall investment portfolio. Residential, office space, industrial, and retail properties each have their own pros and cons, which must be carefully analysed.

Property type

Further, investors would also have to choose between under-construction and completed projects as well as new and resale properties. Many real-estate agents shares that ready units come with benefits such as zero risk of delays, immediate rental yield, savings on service tax and Value Added Tax (VAT) which can amount to savings of up to six percent in most Indian states. On the other hand, under-construction properties can be purchased at lower rates and enjoy tax benefits, and the investor can bear huge returns in future when prices are appreciated, which definitely happens.

Property price

Buying at the right price is an intrinsic part of investing in real estate in order to achieve attractive capital returns. Investors need to find a property that meets all their needs and still remains within their means. Experts point out that while the most affordable locations are likely to witness delayed development, areas that are already expensive have the lowest scope for future price appreciation.

Developer

Picking a wrong developer can be as catastrophic as choosing the wrong location, assert experts. Thus, buyers must carry out adequate research about the developer to ascertain their credibility and track record. With the Real Estate (Regulation and Development) Act in motion, developers now have greater compliance requisites which will weed out fly-by-night and fraudulent operators. The enhanced transparency in the market is expected to make it easier for buyers to shortlist the best developers and projects.

Use this checklist when taking a decision or planning to take a decision of investing in real estate and you’ll be well on you way to a successful outcome that not only meets, but may very well exceed, expectations.

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HOMELAND CITY – The space your business needs to excel. The space which is state-of-the-art decor.

ADDRESS:

Homeland City, Opp. J. H. Ambani School, Udhna Magdalla Road, Vesu, Surat – 395007

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+91 9913328000

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