Residential investment in India - Mumbai vs Bangalore

Mumbai and Bengaluru are the two booming cities in India. While Mumbai has the status of financial and entertainment capital of India, Bangalore has gained its prominence as the Silicon city of India. Mumbai is traditionally an investor's paradise whereas end users dominated the Bengaluru residential investment market. There is always a strong interest from both domestic and NRI investors for residential assets in Mumbai. Of late Bengaluru has also started gaining its status as a residential investment destination among investors. The constantly high performing office market seems to be the driving factor for this investor demand.

In 2014, Bangalore was the most popular location among corporate occupiers with approx. 40% share of commercial absorption across cities in India. The realistic prices and timely delivery of projects by most of the developers is another reason that is luring investors to this city. Markets that are witnessing major unit sales are Kanakpura Road, Whitefield, Sarjapur Road and Hosur Road till electronic city, Bannerghatta Road, Yelahanka etc. Recently, a number of projects have been launched near electronic city. The area is witnessing decent demand on account of proliferating offices in the IT/ITES sector around this micro market. Developers like Godrej, Sobha, Concord Group, Expat Group, DS Max etc. have launched their projects in this micro market. Most of these projects are in the price range of INR 35 to 70 lakh for 2&3 BHK apartments. The residential prices in these sub-urban and peripheral locations are much more affordable as compared to Mum bai's peripheral areas. Compact affordable luxury sounds oxymoronic, but it seems to be the buzzword in the market today. Both the cities are witnessing most of the demand in this segment. Having said that, Mumbai has its own charm and is growing by leaps and bounds. With prices becoming unaffordable in Mumbai city, a large number of buyers are considering buying apartments in navi Mumbai due to considerably lower prices, connectivity to the main city and a planned infrastructure. The development of Navi Mumbai (‘New Mumbai’) is an initiative undertaken by the government to address the growing needs of Mumbai city. As infrastructure and planned development plays a pivotal role in the development of a location. CIDCO, the government authority behind the development of Navi Mumbai focused on providing superior infrastructure and controlled the development by creating dedicated areas for residences, offices, religious purposes etc. Due to this, there was no haphazard construction, which in turn attracted end users to Navi Mumbai. Locations like Panvel, Vashi, Belapur are a few of the developed locations in Navi Mumbai while Kharghar, Ulwe and Taloa are emerging locations which have been developed as a model town by CIDCO. Taloa is relatively a new node of Navi Mumbai near Kharghar. It is predominantly, an industrial location which is slowly gaining prominence as an upmarket residential destination. Developers like Arihant Group, Enky Properties, Expat Group, Paradise Group, etc. have a presence in this area. The prices are in affordable range of IR 3,200 to 5,500 per sq ft. The area is expected to see decent growth as the first metro line which is expected to be operational in 2016 will connect Taloja with Belapur, Kharghar, and Pendhar. This will enhance the connectivity of this location many fold.

When being considered for investment, both Mumbai and Bengaluru markets have their own reasons for investment. The residential demand in Bengaluru will continue to climb due to the strong employment scenario and outperforming IT/ITeS office market. With an expanding economy, improving business sentiment and increasing job creation, the momentum in demand for residential real estate is expected to gain in both the markets.

 

About the author

Surabhi Arora, leads the research team in India and has more than13 years of experience in carrying out multi-disciplinary research and analysis in the area of finance and real estate industry. Surabhi specialises in real estate economics, policies, commercial and residential real estate research with in-depth knowledge of market dynamics across major markets in India.

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