Q2 2016: Decoding Rental Scenario in Indian Cities

In the wake of current economic indicators poised towards fiscal rectitude, the Indian real estate sector is showing early signs of revival. This also comes in the backdrop of myriad initiatives announced by the government in the first half of the current fiscal. Be it the formation of RERA or relaxation in FDI norms or the recent Model Shop and Establishment Act, the sector is definitely envisaging better days in the near future.

Moreover, the announcement of the seventh pay commission is expected to further flush in more liquidity in the market by broadening the buying capacity of the government employees.

Now, coming to news and numbers, a closer look at the data clearly suggests that the number of new launches have taken a backseat this year. While developers are working towards completing their already launched projects, buyers are still in the wait-and-watch mode. Considering the fact that developers are focusing on completing their existing projects, decreasing number of new launches seems to be a positive sign.

In this backdrop, QuikrHomes deconstructed the rental demand and supply activity in the top 8 cities. Now, it is interesting to note that rental markets in all the tracked cities are heading north with ever increasing demand.

Let’s delve deeper.

• In Q2 2016, Greater Noida Sector-4 ranked first in both highest gross rental yield and the highest quarter on quarter rental yield growth with 23 per cent increase.
• All the top gross rental yield markets in this quarter are new entrants to the list.
• On an average, rental yield is in the range of 2.9-3.7 per cent.
• As per the demand, four out of the top five markets are from Delhi alone unlike last quarter wherein not a single locality from Delhi managed to find a place in this list.

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• With proximity to the financial capital, good connectivity, and robust infrastructure, Mumbai suburbs continue to show their dominance in the rental markets of MMR.
• Both, Mira Road and Malad West are the top markets based on gross rental yield, rental demand, and rental availability in Q2 2016.
• Mira Road clocked highest gross rental yield with 3.1 per cent. It must be noted that Mira Road is the new entrant to the list of the top market for rental yield.

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• Kothrud has emerged as the showstopper in all the top markets based on Rental Yield, Rental Availability, and Rental Demand. Moreover, it has seen maximum Rental Yield Growth in Q2 2016.
• Wakad, Hadapsar, and Kothrud continue to top the list of markets based on rental availability in Q2 2016. While Baner and Katraj are the new entries to the list.

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• It is Interesting to observe the growing rental yields in prominent markets of the city such as Banashankari, Jayanagar and JP Nagar with rising rental values. This can be mainly attributed to the increasing employment opportunities in these areas.
• The presence of IT/ITeS has made Electronic City and Whitefield prominent localities for rentals. However, it is remarkable to see how the old localities of Koramangala and Indiranagar have also retained their sheen with a healthy demand and supply ratio.
• Hosur Road, which maintained its top slot for the last two consecutive quarters, was replaced by Banashankari in Q2 2016 for maximum gross rental yield.

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• Interestingly, in Q2 2016, all the top rental markets based on availability have seen an increase in gross rental yield in comparison that in Q1 2016.
• All top 5 markets based on gross rental yield are new entries to the list. The previous quarter top markets included Adyar, Mylapore, Anna Nagar, GST Road and Padur.
• Chromepet recorded maximum rental yield with 4.4 per cent. Strategically located in southern Chennai along the GST Road, Chromepet sees high demand from IT professionals (mainly working in the IT corridor of OMR) and the students studying in nearby colleges.

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• While the western region of the city dominates growth and development pivoted along the IT industry, we can see an increase in rental activity and demand owing to the elevated Metro corridor connectivity.
• Interestingly, unlike other major metros, Hyderabad is undergoing a supply shift towards larger unit configurations in the newly developed residential markets near Cyberabad.
• There is very good rental demand for residential properties and supply is also at par with this demand in most of the major markets including Gachibowli and Madhapur amongst others.

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• Riding high on the back of infrastructure and connectivity, Satellite secured a top slot in both- top markets based on rental demand and rental availability.
• Interestingly, all top market with maximum rental demand are skewed towards Western part of the city due to the presence of IT companies in the vicinity and swift accessibility via Sarkhej-Gandhinagar Highway.
• Situated in North Ahmedabad, Chandkheda has emerged as the top market based on Gross Rental Yield with 3.8 per cent. Strategically located at the junction of Sardar Patel Ring Road and NH-41, the locality is well connected to all major locations of the city.

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• All the top markets based on rental availability and rental demand are well-established and most sought-after localities of Kolkata. Most of these localities boast of excellent social and physical infrastructure and offer excellent connectivity.
• Picnic Garden has been witnessing an increase in spillover rental demand from nearby premium localities of Ballygunge, Gariahat, and Tollygunge. This has made the area secure the first position in the list of top markets for gross rental yield.


Faridabad Is Rising Up High In Its Real Estate Ventures

Notwithstanding its nearness to Delhi, Gurgaon, and Noida, and with genuinely great network with its neighboring urban areas by street and rail courses, the properties in Faridabad has not kept pace with the land market in other National Capital Region (NCR) urban areas.

Disregarding all its capability to wind up a ‘model city’, Faridabad has endured by virtue of poor base and terrible availability, and has neglected to enlist the sort of development saw in neighboring Gurgaon and Noida.

“The greatest issue with Faridabad has been the poor network. The data innovation industry picked Gurgaon over Faridabad real estate in light of its better network with Delhi and vicinity to airplane terminal.

Since youngsters with high discretionary cashflow work in IT industry, it had a gradually expanding influence on the land market and prompted mushrooming of shopping centers and prodded the interest for lodging. Faridabad, then again, has for the most part assembling industry utilizing individuals with less extra cash,” said SPR Buildtech Ltd chief Nalin Saluja.

Be that as it may, the land market in Faridabad is currently blasting with enhanced base like Gurgaon-Faridabad turnpike, six-path Mathura Road, extension of metro rail, and establishing of framework stone for the Faridabad-Noida-Gaziabad freeway.

“Despite the fact that very few new tasks have been propelled in the course of recent years because of stoppage, more than 70 for each penny stock in 30 private undertakings in Greater Faridabad is as of now sold. Additionally over about six IT park activities are at the propelled phase of fulfillment in Faridabad and the business sector is relied upon to blast with their fruition. In next couple of years, we trust the Faridabad business sector to develop at a rate quicker than Noida,” said Mr. Saluja.

The land segment likewise has a great deal of trusts and desires from the new government. “Today when the legislature is taking a shot at the Master Plan 2031, we are sorry to learn that even the advancements proposed under the Master Plan 1991 are yet to be actualized. We trust that the new government start the improvement of physical and social base in the city,” said J.P. Gupta, VP, Confederation of Real Estate Developers’ Associations of India (CREDAI), NCR, Haryana.

A portion of the significant requests of the CREDAI, NCR, Haryana, Faridabad, incorporate development of stadium and business foundations in Sector 79 according to the Master Plan 1991, up-degree of the proposed government doctor’s facility into restorative school, charge refund to mechanical units in Ballabgarh, and development of sewage treatment plant for Sector 75 to 89.

How to make your property more appealing

Wanting to sell your home for a good price and in a reasonable time frame are standard goals for the majority of sellers. However, when you are dealing with a tough real estate market and struggling to break even on a property, you need to do everything you can to make your home stand out.

You need to woo a buyer, and to do that, you need to make your home as appealing as possible. Most real estate agents understand that a first impression can make or break getting a proper sold for the most money in the least amount of time.

I reached out to my friend, Bill Gassett, an excellent Milford Massachusetts Realtor to get his input on how to make your property more appealing before it hits the market. Bill was excited to share his real estate expertise of buying at Gala Pride Palms in Thane West, as the appearance of a home is one of the most important aspects in home sales.

Bill has shared the following ideas as the best ways for you to make your home attractive to as many buyers as you can. Not all may apply to you, but implement the ones that do to give yourself that extra edge in a competitive real estate market.

Address Home Defects

As the owner of your home and castle nobody knows the property better than you do. More than likely you have noticed some of the minor defects that your property may have accumulated over the last few years. Before your home hits the market it will be extremely important to address these things. Buyers love those who show pride of ownership. When things look great buyers do not go out of their way to look for issues.

This will not be the case if your home has defects that are readily apparent. The other thing to remember is the buyer will be doing a home inspection once they have secured the property. Many sellers do not realize this will be one of the biggest hurdles to clear in the transaction.

This makes it extremely important to have an understanding of how to prepare for a home inspection. The number one reason a home sale falls apart is due to things discovered at a home inspection. If you are unsure of the overall condition of your home it may not be a bad idea to get a pre-inspection done. Spending a few hundred bucks can be a great investment in keeping your sale on track.

Emphasize Storage Space

Everyone wants storage space when they buy a home. While you may have numerous closets and other storage areas, you need to make sure that buyers see how much space is available to them. This means cleaning out your closets, your storage shed and your garage. You don’t have to completely empty them, but do remove at least half of what is in there and organize the rest to give an idea of the potential of each space.

If your home is extremely cluttered you make want to consider either a storage POD or a temporary storage facility. A POD can be very convenient when you need immediate access to your things and don’t have the time or inclination to drive elsewhere to access your things.

For those that have larger items and really need more room storage facility would make more sense. You can see some excellent advice on how to pick a storage facility. Use these tips to pick the right storage environment for your needs and budget.

Hide The Pets

Pets are fantastic for companionship and enjoyment, but they do not help you sell a house. Having your golden retriever jump up on a buyer in greeting or having cat fur wafting about the house and sticking to clothing will not present an attractive image. It makes your home look dirty, and no one wants to spend good money on a dirty home. Have your house professionally cleaned, and take the pets to a friend’s place when showing the home.

This is true of your backyard as well – clean up any messes and re-sod if your dog has worn a muddy path along the fence. Patch any holes in the yard your pet may have created. Understanding how to move with pets is an important consideration when you are trying to get the maximum return out of your home while also making the process as stress free as possible.

Brighten Things Up

Buyers today want a bright, well lit and cheerful home. This means you need to maximize the amount of light coming into your house, and you need to enhance that light once it enters your home. This can be done in several ways that do not have to cost a lot of money.

Make sure all of your windows are clean, and consider removing the screens to make things look clearer. Cut back any overgrown bushes in front of windows to allow the most light in, and invest in some sheer drapes or do away with the drapes altogether. If your wall colors are excessively dim, you may want to throw on a fresh coat of light colored paint.

All of these things can be done pretty easily, and will make your home look inviting instead of intimidating. In real estate light neutral colors sell well – unusual exotic colors do not!

Make It Look Less Lived In

Buyers go into a purchase wanting to start over. They have visions in their heads of a clean slate, a new life and the home of their dreams. You want your home to fit into this ideal, but to really be effective at this, you have to remove some of yourself from the property.

You may love your worn in old couch, the mural you painted on the wall when you first took up painting or the hundreds of collectibles you’ve accumulated on your shelves. Unfortunately, these same things that make your home very much “you” may turn off potential buyers. It may be too much to say make your home generic, but you do want to make space for the dreams of the buyer. Don’t make your home look “sterile” but make sure your home has a clean enough slate that a buyer can picture their own possessions in your home. Keep in mind that a significant amount of buyers lack vision and cannot see past your decor.

A Realtor can help you determine what to keep out, and what to store before you put your house up. Some things may be generally appealing, while others won’t. A savvy real estate agent will know which is which. You can also take a look at some excellent staging tips that will enhance the sale-ability of your home. Many of these tips do not cost a lot of money.

Best Foot Forward – Always

You want your house to be as immaculate as possible the entire time you are making it available for showings. If this sounds difficult, that’s because it is. Living your everyday life in a house prepped to show can be tedious, which is why it pays to sell quickly. Your home needs to be clean, and ready to show on a moment’s notice.

Bring in a professional house cleaner to prepare your house for showing, and consider having cleaners come in regularly to keep the look up while your home is on the market. One mess can be enough to turn off a potential buyer, and miss out on the sale you need.

Price Competitively

This is one of the most difficult concepts for many sellers to embrace, because it seems counter intuitive. Why would you want to risk selling your home for less than you need? In reality, putting your house up for a price that is lower than competitors will very often set off a bidding war, eventually resulting in a price you are happy with.

If your home is priced improperly, there is nothing to spark interest. You will in fact shoot yourself in the foot and more than likely sell your home for less than you would have if priced correctly coming out of the gate.

Seek Knowledgeable Help

Find a real estate agent you trust, and apply his or her advice as well as you can. Each home is different, and your strategy must be based on the realities of your individual market. A good agent will know this, and will be able to guide you through the process with a steady hand.

There is nothing better than having a top notch real estate agent in your corner. Just like any other profession there are the creme of the crop and those who are considered average. You don’t want average when trying to get the most money possible for your home!

Final Real Estate Thoughts

Use all of the tips above to make your home more appealing before selling. By following smart advice you will dramatically increase not only your odds of success but the stress level of having your home on the market for an extended period of time. Best of luck with your sale!