A recent report by Colliers highlights the unprecedented growth in India's real estate sector, presenting significant investment opportunities. As the real estate market gains momentum and experiences rapid infrastructure development, several micro-markets in major Indian cities are evolving into prime investment areas. Notably, investing in land and monetizing it through rental properties is yielding returns up to 10 times higher than ready apartments. Eco-friendly locations and tourist destinations are particularly popular for land investments, with Maharashtra-Neral-Matheran, known for its prominent developers, infrastructure projects, and amenities, emerging as a leading investment corridor. This trend is expected to continue, driven by ongoing infrastructure projects and heightened real estate investments.
In a recent report published by Colliers, it has been revealed that the real estate sector in India is currently experiencing unprecedented growth, making it an opportune time for investors to capitalize on the myriad benefits it offers. The report underscores that as the real estate market continues to gain momentum, accompanied by rapid infrastructure development, various micro-markets across major metropolitan cities in India are evolving into prime investment corridors.
Investing in land and monetizing it through rental properties is yielding returns that are 10 times higher than ready apartments. This surge in demand for land investments is particularly pronounced in eco-friendly locations and key tourist destinations. The trend towards investing in serene, natural settings gained substantial traction during the lockdowns and travel restrictions brought about by the pandemic and has since been on an upward trajectory.
Leading the charge is Maharashtra-Neral-Matheran, often dubbed the financial capital, economic powerhouse, and industrial hub of India. Mumbai, with its exorbitant property prices, limited land availability, and burgeoning population, has become one of the most dynamic real estate markets in the nation, resulting in significant demand for real estate investment opportunities. Key hotspots in this region include Vasai Virar, Bhiwandi, and Neral-Matheran, driven by the presence of non-agricultural large land parcels, pivotal upcoming infrastructure developments, and the involvement of renowned developers.
The Neral-Matheran corridor has emerged as a focal point for investors, courtesy of prominent developers undertaking substantial real estate projects, its proximity to the city centre, and a plethora of established social amenities, such as the Bhimashankar Wildlife Sanctuary, ND Film Studio, Neral-Matheran toy train, and Rambag point. This micro-market is now recognized as one of the foremost investment regions, boasting an average annual rental yield of 15% for holiday homes and anticipated 5X returns on land investments over the next decade.
The tourism and industrial hub of Gujarat, the Sanand Nal Sarovar corridor, ECR in Chennai, Medchal in Hyderabad, and New Town and Rajarhat in Kolkata are also witnessing a surge in investment interest. These corridors, characterized by abundant land availability, burgeoning tourism, and increasing infrastructure development, are emerging as prime destinations for investments, offering average annual rental yields ranging from 2.5% to 4.0% and annual land price appreciation of 6% to 8%.
Although the real estate investment market for land is still in its nascent stages in certain corridors, regions in proximity to tourist destinations and major cities have experienced exponential growth in the wake of the pandemic and heightened real estate investments. Consequently, the growth of second homes or weekend homes in India is projected to skyrocket, driven by extensive infrastructure projects planned and under construction across various states. Investors are flocking to these emerging investment hotspots, with a promising outlook for the Indian real estate market on the horizon.
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