The Indian real estate sector has rebounded strongly in the post-crisis environment supported by an innate, robust appetite for housing and other favourable economic and sector drivers.
The sustained high levels of output growth, rising disposable income, availability of historic low rate of interest and higher rise in nuclear families are strong economic drivers of the development of the real estate sector. Further, the government’s initiative of Home for All will provide an impetus for affordable housing.
The residential component of the Indian real estate market looks particularly attractive with a significant demand-supply gap. The demand-supply gap is highest in the low and mid-income segments, wherein certain cities demand exceeding supply by a multiple of three or four.
The Covid pandemic has resulted in the permanence of Work from Home or at least partially so. The lockdown and spread of the pandemic led to the realisation of better home space and cleaner, well-developed localities. The work from home concept has reduced the commute to the workplace, thus lowering the importance of travel time in the home location decision. Those with 1BHK are looking to upgrade to 2 BHK and so on.
In the last two decades, affordability has gone up with an average income hike of 8%-10% per annum, whereas property prices have seen a rise of just about 1%-2% since 2013. Translating into multiples means a property that was 5.9x average annual income in 2000 is today available at 3.3x yearly average income. Coupled with the lowest home loan interest rates of sub 6.75% and a host of other sops makes it a compelling buy for the end-user.
Tier-II cities are seeing a good jump in demand as Tier I cities are getting crowded and with highly inflated prices. In addition, high disposable income has also pushed the need for a second home or holiday home in Tier-II cities. As a result, Nasik is seeing a sharp rise in demand for home buying.
Nasik has agro-based industries like Wineries, cold storage etc. There are state-level research and training institutes in the city and educational institutions like Yashwant Chavan and the Maharashtra University of Health Science. Mumbai, Pune and Nasik are referred to as the Golden Triangle of Maharashtra, where socio-economic development is swift. Further, the connectivity of Nasik with Mumbai and Pune is improving very fast. All these factors make Nasik a desirable location to own a residential house. Many entrepreneurs are looking at Nasik as a new destination that will create an employment opportunity in the city, driving demand for a home.
Further, Nasik has an excellent climate and abundance of land at a relatively cheap rate. It is also an important pilgrimage centre surrounded by Trimbekeshwar, Saptashrungi, Shirdi. Therefore, tourist prefers Nasik as a central place for visiting other sites.
Nasik is developing as an industrial space as it has big factory setups by Bajaj Auto, Mahindra and Mahindra, ABB, Crompton Greaves and MICO. Further, Nasik has a solid urban local body with a surplus budget and excellent credit rating.
These factors have contributed substantially to the growth of the real estate sector in Nasik in the past. They will continue to grow as it has immense growth potential to develop as a residential and commercial real estate market shortly. Real estate developers see this as a growth opportunity. Strong, established brand, quality work, and customised solution provider always stands to gain higher.