Wednesday, December 20, 2006

Hindustan Times boom article

Last week we began a discussion on the booming real estate scenario in India and took a look at the reasons for it.

What is noteworthy is that the boom in property prices has not been restricted to big cities alone. Smaller towns and suburbs of large urban centres have also posted sharp upswings in the real estate prices. The primary reason for this appears to be the growing trend of well known corporates setting up bases in these areas.

With this trend expected to sustain itself over a period of time, property prices are bound to continue spiraling. The chronic shortage of housing for the ever increasing population will also ensure that property prices continue to rise at higher than the average rate of around 10 per cent per annum in the country.

Let us now take a tour around India’s mega cities and check out the real estate scene in each:

MUMBAI: The financial capital of India has clocked the highest real estate prices over the years. Mumbai attracts lakhs of new comers from every rung of society each year. Naturally, this gives rise to a huge demand for housing which in turn ensures that real estate pricing remain high.

It goes without saying of course, that prices differ from place to place intra–city. Certain areas like Colaba, Malabar Hill, Worli and Bandra are considered prime locales and command a substantial premium, thereby taking property prices to dizzying heights.

Territorial Development Rights (TDR) is a concept which has Mumbai completely in its sway, and throughout the city one finds buildings growing vertically. In other words, existing structures are being taken over by builders and fresh floors are being added.

Satellite townships of the city such as far flung Dombivili, Ambernath, Virar, Vasai have also recorded a fair upswing in the prices, thanks to the insatiable demand for real estate.

BANGALORE: The Information Technology capital of India has been witness to frenzied construction activity. Bangalore has been recording an annual real estate disbursement of more than Rs 4000 crore.

The city posted a net absorption of about 4.7 million square feet of commercial real estate in the first half of 2005 alone and has not looked back since.

With chances of the real estate sector opening up for FDI strong, various foreign investment companies and private equity funds are looking at this city with great interest and this is bound to impact the market positively

Source: hindustantimes

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