Real Estate Regulatory Bill gives more power to buyers to take on errant builders

The much-awaited Real Estate Regulatory Bill has now broken the last hurdle to become a concrete legislation when it was passed by the Upper House of the Parliament – Rajya Sabha on Thursday much to the relief of home buyers who now got a legal arm to protect their interests.

The Bill has various provisions which can protect the interest of buyers, who have remained mute victims for years due to irregularities in the real estate dealings by unscrupulous builders across the nation. The provisions of the bill now will make the developers accountable and also bring in the much-needed transparency in terms of dealings and quality of the products.

Indian real estate has so far been remained unregulated which has made many becoming fly-by-night builders to take advantage of the gullible home buyers. Big builders are now happy because this bill will regulate the industry and cut-to-size the small-time developers who account for more than 60 per cent of realty transactions in India.

However, certain developers did express their disappointment saying that the Bill did not take Government agencies, whose delay in approvals can impact on project completion schedule, from its purview. It’s now up the state governments to implement it with or without further amendments.

Let’s see what builders, analysts and industry organizations have to say about the Bill becoming a Law.

T Chitty Babu, National Chairman of CREDAI:

T Chitty Babu, while welcoming the Bill, said, “This will give a level playing field for developers and also regulate the approval process.” However, he said that the Bill has failed to bring an important stakeholder into its fold — the government agencies.

Explaining further, he told New Indian Express, There are four stake holders in the development of a real estate project - the developer, the financial institutions and the customer. The fourth stake holder, the government, has not been brought into the ambit of the bill. The government plays an important role in the approval process. Now we will have 58 windows and a door.”

Sunil Kanoria, president, ASSOCHAM:

Apex industry body ASSOCHAM said the Bill would to lead development of urban infrastructure,  help realise government’s vision of ‘Housing for every Indian by 2022’ and play a pivotal role in structural transformation of India’s economy.

“Apart from resolving key issues that are hampering the growth of the real estate sector, this bill will lead to institutional reforms in land acquisition, approval processes and taxation that are much needed to expedite development of affordable housing,” said Sunil Kanoria, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“Besides, it will also help in facilitating investments through FDI, REITs and other innovative real estate financing models will help attract long term funds from foreign and domestic investors,” Kanoria said.

Arvind Jain, Managing Director - Pride Group: 

The real estate regulatory bill has been long in the pipeline, and has now cleared all roadblocks and become a law. Various decision makers involved in it had been ambiguous about their stance towards this vital regulator, and as a result it remained pending. Now, it has finally received the green signal and is all set to revolutionize the Indian realty market. It will empower consumers by giving them confidence while making their real estate investments. It imposes strict regulations on how developers conduct their business, and underwent various redrafts aimed at doing this. It is very encouraging that the bill is now a reality. 

Kishor Pate, CMD - Amit Enterprises Housing Ltd: 

The real estate needed the Real Estate Regulatory bill more than any other single piece of legislation, even though GST, the Land Aquisition & Rehabilitation Bill, single window clearance and industry status are by now means of less importance.  The industry has been in express need of an apex body through which all concerns of consumers can be addressed transparently and efficiently. We will now see a radical transformation of the entire residential sector. Strict enforcement of project delivery timelines, verifiable construction quality and assurance of legal clearances will finally become a reality, and the consumer confidence which had all but evaporated will return. It is a most welcome development.

Anil Pharande, Chairman - Pharande Spaces: 

The Indian real estate sector has historically been unregulated and ill-organized. Unfortunately, the unorganized segment has so far represented the largest share of the market, and it is in this segment that consumers have in innumerable cases been held hostage to by unscrupulous practices of ruthless developers. The real estate regulatory bill was drafted with a vision to give clarity and assurance to real estate buyers via various strictures. Now that it has become an enforceable law, it will have a profoundly positive effect on how both domestic and global investors view Indian real estate. More importantly, it will give homebuyers a strong measure of assurance. 

 

Anuj Puri, Chairman & Country Head, JLL India:

The passing of the long-pending Real Estate Regulatory Bill is an unequivocal victory for the Indian real estate sector. Its enactment as a law will almost single-handedly revamp the way the sector works across the board, from developers to end-users and investors, to lending institutions and government agencies involved in the buying and selling of property. It is by far the most decisive step the sector has taken towards transparency and reaching towards the kind of standardized processes, procedures and accountability guidelines that the industry requires to progress.

Harshvardhan Neotia, President, FICCI:

Commenting on the Real Estate Regulatory Bill, Harshvardhan Neotia, President of FICCI, said, “The passing of Real Estate Bill, 2016 in Rajya Sabha is a landmark step towards enhancing the credibility of construction industry by bringing in transparency and accountability in execution of projects. I hope this bill will put in place an effective regulatory mechanism that would safeguard the interest of consumers as well as provide protection against fly by night operators. The passing of bill should enable timely approval and execution of projects which will raise the confidence of consumers and also give a huge boost to the growth of real estate sector.”

Though this is a good beginning after a prolonged delay, the Real Estate Regulation and Development Bill becoming a Law, in a way would prompt buyers to go for purchasing homes without any apprehension of being cheated. This will help the sagging real estate sector to stand up to meet the increase in demand. Though there are still uncertainities like the appointment of regulators   in states and implementation in toto by state governments, the bill in the long term would provide the much-needed impetus to the sector's overall growth.

Also read the article in Press Release Point.

Maharashtra Housing Regulator Will Ensure Fair Deals For Home Buyers

Arvind Jain, Managing Director - Pride Group

When the ruling NDA government at the Centre is still fighting to get Real Estate Regulatory Bill passed in the Rajya Sabha, Maharashtra is all set to have its own State-level realty regulator, as chief minister Devendra Fadnavis has cleared the decks for this much-awaited initiative.

The Maharashtra housing regulatory authority has the best of intentions at heart, and will enforce higher levels of transparency. It will fill a number of gaping loopholes at one go. One of the highlights of the policy is that it will make registration of real estate developers and contractors under a competent authority mandatory. Without such registration, developers and contractors will not be granted permission to conduct business at all.

Because registration was so far not been required by law, it was possible for literally anyone with some land and capital to become a real estate promoter. This is one of the primary reasons why there has been such a massive spate of illegal buildings of spurious construction in the peripheral areas of our cities. 

Unfortunately, a majority of buyers - especially in the budget housing segment - maintained a kind of blind faith that anyone who has the capacity to raise a building has to be registered somewhere, and that his activities are therefore happening according to some basic industry norms. This has led to countless buyers in Maharashtra being cheated by unscrupulous people who do not honour even the most fundamental criteria of ethics. 

The MHRA will go a long way in protecting home buyers from delays in possession timelines, literally empowering them to take control of a project that has been stalled because of any reason. In fact, the regulator will literally separate the wheat from the chaff by presenting a firm legal rationale for buyers to opt only for registered, properly capitalized developers who have a convincing record of timely completions and standardized quality of construction. 

In short, the HRA marks the beginning of the end for fly-by-night operators and the plague of malpractices that has been holding the real estate sector in Maharashtra to ransom for far too long. However, in its current draft, it does not appear to acknowledge the massive issues that real estate developers have been facing on their part. 

Apart from protecting buyers from unscrupulous developers, it should also protect developers from unscrupulous government bureaucrats and agencies who have rendered the entire development process an expensive nightmare. If the state government intends to play the role of facilitator and enabler with this policy, it should work both ways and ensure that credible developers are not hampered.  

About the Author:

Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million sq.ft. of constructed area. Pride Group has recently launched Pride World City, the 400-acre luxury mega-township at Charoli, Pune.

Disclaimer: The opinion/s expressed by the author is his own and the moderator doesn't necessarily endorse the same.

Pride Group launches ‘Pride World City’ at Charholi in Pune

Pune: Leading real estate developer Pride Group today launched mega city township ‘Pride World City (PWC)’ at Charholi, near Lohegaon airport, Pune. The world-class integrated township is being developed on a sprawling 400 acres land at one of the most promising real estate locations in the city, the company said in a release.

Being developed with investments of Rs. 6,000 crore in construction and an additional Rs. 500 crore in infrastructure, PWC falls within the jurisdiction of the PCMC, the most progressive municipal corporation in Maharashtra, and will be the largest real estate development in the region to date.

Apart from its proximity to Pune Airport, this mega city also benefits from its location along the proposed Ring Road, which abuts the north area of the project.

Arvind Jain

“This project is being created against a backdrop of picturesque mountains and valleys and bracing greenery,” says Arvind Jain, Managing Director, Pride Group, adding, “The view is further enhanced by this township’s multiple water collection ponds and an unbroken vista of open skies. At Pride World City, we have created the ultimate integrated township with cutting-edge independent infrastructure and ultra-modern facilities and amenities in the midst of an unpolluted environment. In fact, it was Charholi’s unmatched environmental attributes that prompted us to create Pride World City here.”

Pride World City’s nature-inspired integrated master plan is divided into 14 Sectors offering a wide range of residential homes and commercial properties. The project includes an IT Park and offers IT as well as non-IT office spaces to provide a self-sufficient economic dynamo as well as the ultimate walk-to-work lifestyle. In addition, Pride World City will include best-in-class social Infrastructure via modern retail, leisure, sports facilities, schools, hospitals and spiritual spaces.

The world-famous D Y Patil Knowledge City is located right besides PWC; with the addition of more educational institutes, PWC is all set to become the definitive education hub of Pune. 

PWC encompasses 25 million square feet of built-up area. 20 million square feet have been allotted to residential property developments consisting of 20,000 units.

The residential offerings include 1-4 BHK ultra-modern apartments in towers ranging from 12-30 storeys, as well as lavish Marina-facing bungalows. The balance five million square feet will account for commercial spaces that will include a Business and Tech Park, a mall and multiplex, a 5 star hotel and IT SEZ, among others. PWC’s first phase will be ready for possession in two years’ time. Simultaneously, two phases will be constructed every year, and the project is scheduled for completion within 12-15 years.

“PWC will generate employment for 15,000 people per year and will house 1.5 lakh people, of whom 80,000 will be residents while 70,000 will be working professionals”, explains Arvind Jain. The current sale price is Rs. 4,500/sq.ft. and is expected to rise to Rs. 10,000 per sq.ft. over the duration of the project, the company claimed.

PWC’s Features At A Glance

·   Multi-specialty hospital and diagnostic centers

·   Smart city infrastructure and solutions

·   Wi-Fi hotspots across the city

·   Convenience shopping Bus terminus

·   Child daycare, play school & Higher secondary school

·   Master Club

·   5 star hotel

·   Business & Tech Park

·   IT SEZ

·   Playgrounds

·   Cycle track around the city

·   Waterfront restaurants

·   ATMs

·   Fuel station

·   Fire station, police station and post office

·   Bank

·   Mall, multiplex & departmental stores

·   Meditation pavilion

·   Amphitheatres

·   Cultural and Performing Arts Centre

·   Waterfront restaurants

 “Today’s home buyers are more aware and discerning than ever before. They expect more from their homes than just four walls - they want a lifestyle driven by world-class infrastructure, classy ambience and a convenient location. Pride World City meets the aspirations of customers with a global mindset, offering a quality life that sets the highest benchmark for Pune so far. Charholi is going to become the most happening location in the city," adds Arvind.

How To Choose The Best Integrated Township

Indian real estate is now at a stage of evolution wherein integrated townships are no longer just an option - they are a dire necessity. With a number of India's large developers now developing these futuristic mini-cities, townships are rapidly becoming the most significant model of property development in the foreseeable future, says Arvind Jain, Managing Director - Pride Group.

With urban living rapidly giving way to extreme turmoil and lack of civic amenities, it is definitely high time for the proliferation stage of townships in India. Indian metros invariably 'explode' from the centre outwards, with the inner locations becoming the focal points of heat and pressure. Therefore, urbanization also happens with the city centre consistently receiving - and maintaining - the highest saturation of population.

Developable land in these places becomes increasingly expensive and soon unavailable. This leads to developers active in these areas to build up every square inch of their plots and selling their units there at exorbitant prices. In this kind of environment, opens spaces, infrastructure and overall accessibility are rapidly eroded by buildings. Also, these areas are increasingly plagued by extreme traffic congestion, shortage of parking and very high pollution.

Conversely, integrated townships offer their residents complete supporting infrastructure. They are no developed with the objective of maximum development potential but maximum liveability potential, and this means that they also provide green and open spaces.

In fact, the difference between the liveability quotients of integrated townships versus traditionally developed residential areas in a city are considerable - while the former enjoy clean air, green open spaces, regulated traffic, constant water and power supply and quick access to shopping, healthcare and entertainment, the latter tend to be defined by high pollution levels, a 'concrete jungle' ethos, bumper-to-bumper traffic, crippling commuting times and frequent power and water cuts.

There is no doubt that integrated townships are fast becoming the only viable long-term residential choice for metropolitan living. With this emerging as a clear fact, city dwellers that are looking to upgrade to the township life are on the rapid increase.

The following are some basic tips for choosing the right kind of township:

Check whether the developer has obtained all the requisite municipal and environmental clearances. There are a number of approvals and clearances that the developer must obtain before his township project is legally sacrosanct and future-viable. Ensuring that all of these are indeed in place is very important to safeguard your investment as well as the future comfort of your family.
 

Check the developer's track record for completing his larger projects on time. Most developers of townships also have smaller projects to their credit, but smaller residential projects also take less time and capitalization to develop. Large integrated townships are developed in phases and take much longer to reach final completion, so the developer should show sufficient evidence of healthy capitalization and a flawless record for handing over possession to customers.
 

Check whether the developer has included a sufficient saturation of commercial buildings in the plan. The generous availability of office spaces within the township has a two-fold benefit - firstly, it will mean a potential walk-to-work option in the future. Secondly, the investment value of residential properties increases with proximity to job-generating commercial establishments.
 

Check on what kind of developments will come in to take care of your shopping, entertainment and healthcare needs. Likewise, there should be good schools planned within the township. Do not be satisfied with the mere proximity of such establishments outside the township - they should be included within the township itself.

By Arvind Jain, Managing Director - Pride Group

How Does Inflation Impact Property Market

Contrary to the general belief, real estate prices do not necessarily react to inflationary conditions,   feels Arvind Jain, Managing Director of Pride Group.

It is interesting to note that how most people think of inflation. Apparently, the most prevalent concept of inflation is something like what happens to spectators at a cricket match. At some point during the match, the people in the front rows of the stadium rise to their feet to get a better glimpse of what is happening on the field. As a result, the spectators in the back rows cannot see the action clearly so they rise up too. Very soon, everyone is on their feet!

Another perception among most people is that inflation drives up the prices of everything uniformly. That is why it is commonly believed that real estate prices rise simply because the cost rise of everything. This is incorrect. The fact is that real estate prices will either fall or remain static in an inflationary environment.

Inflation is a dynamic that is largely dictated by the cost of credit. This is how it works - the cost of essentialities such as food grains and petrol rises, while the common man's income remains the same. In other words, his spending power reduces. Banks make a note of the fact that the baseline cost of living has increased and recalibrate their loan interest rates upward.

Because the cost of borrowing has increased while incomes have remained static, people become wary of taking loans for anything - including home purchase. The natural reaction from real estate developers would be to bring property prices down so that sales pick up again. This does happen in some cities and locations, but not everywhere. Here are the reasons.

Many developers are as dependent on the cost of borrowing as their buyers are. This is especially the case with smaller developers in Tier 2 or Tier 3 cities who have not launched many projects and have therefore not been able to create a self-sustaining churn of capital. Such developers are able to react to the reduced sales brought on by inflation by lowering their rates.

Such developers are able to do this because though the overall cost of development remains more or less constant, land acquisition costs are lower in smaller cities. Price reductions are the last recourse for ailing developers, but smaller developers with lower investments into their projects and greater dependence on the cost of lending can and will offer them if they perceive this to be the only option.

If even this last course of action fails, the developer goes bankrupt and is forced to surrender all business interests to the bank, or sell them to a more established player. This is, in fact, one of the integral factors of the process of consolidation, wherein more and more smaller operators give way to larger players. 

The scenario is different for larger developers who are active in the primary cities. Having been in the real estate business longer, they have been able to achieve a degree of capitalization that reduces their dependence of debt funding. However, their investments in the land required to build projects in the larger cities are naturally higher.

Such developers are not able to bring down the pricing of their properties despite a slowing down in sales. However, they are able to weather the inflationary storm longer because of their healthier capitalization. For this reason, established developers in larger cities will not use price reductions to boost inflation-impacted sales. At the same time, they cannot raise their prices in tandem with the natural laws of property appreciation, since this would impact their competitiveness on the market.

This means that in the case of well-located quality projects by established developers, inflation will have the effect of keeping prices static until reduced inflation brings down the cost of credit. Once this happens, prices will rise again without having gone down at any point.

It goes without saying that understanding how inflation impacts short and long-term property pricing in different cities, locations and projects can make a big financial difference to prospective home buyers.

Slow Economy - Advantage Real Estate Investors

Since home purchase is invariably the biggest investment that most Indians make in their lives, they should be very cautious about doing so during the times of financial uncertainty, opines Arvind Jain, Managing Director - Pride Group 

The Indian economy has had another tough year. Inflation went as high as 7.52%, job opportunities reduced significantly across industries, the rupee saw steady erosion against the US dollar and market sentiments reached what was possibly their lowest point ever. And yet, things could be worse.

During the depths of the US economic crisis, entire American cities turned into ghost towns. Thousands and thousands of people lost their jobs and were reduced to living in tent colonies, trailers and on the streets. Banks foreclosed countless mortgages which the borrowers could no longer afford to pay. Homes were put on the market at ridiculously under-valued prices and still found no buyers.

The scenario is quite different in India. Jobs were lost, but the situation was definitely not as severe as in the US, where people not only lost jobs but also their pensions to the ailing economy. While there has definitely been an increase in home loan defaulters in India, there has certainly been no glut of foreclosed homes on the market.

Most middle-class Indians have been able to continue paying their EMIs and keep their homes. This is largely thanks to our conservative banking system, which requires banks to do multiple checks before allowing a home loan to go through. Also, Indians consider their homes their most important possessions, and therefore make paying their financial obligations towards them their highest priority.

What does all this have to do with real estate investment? A lot. One symptom of a recessionary economy is that people think twice - and thrice - before making any new high-value financial commitments. Since home purchase is invariably the biggest investment that most Indians make in their lives, they tend to be very cautious about doing so during times of financial uncertainty.

They will pursue their home ownership dreams when they perceive that stability has been restored in the economy - and therefore in their lives. Until then, they would often prefer to live in rented homes. This is also known as the 'wait-and-watch' mind-set, which results in reduced demand for homes during the period of insecurity.

Because property prices are a function of demand, they tend to reduce in times of economic uncertainty because that is the only way to keep sales going. This is the ideal time for property investors to pick up properties at lower costs and rent them out to purchase-averse families. When the economy improves, so will the appetite for home ownership. A rise in property prices will follow naturally, resulting in a tidy profit when the property is put up for sale.

It is not possible to ascertain exactly when property prices will reach their lowest point - and start picking up again after that. However, one good indicator is the job scenario. When the industries that drive the economy start stepping up on hiring, the economy improves. Going by news reports, 2014 is going to be a year of massive hiring sprees for India's banking and Information Technology industries. This will mark the onset of economic revival - and therefore a pickup in demand for properties, which will signal a hardening of property rates.

While the reduced sentiments prevail, developers and investors in India's larger cities are still open to negotiation. Moreover, many of the new projects that were launched in the low economic period featured significantly reduced price tags. Is this the fabled 'market bottom' that every property investor considers the magical entry point? Impossible to say... but whenever it does come, it will not last forever.

'Walk Score' Gaining Importance In Pune Real Estate

'Walk Score' factor accounts for a much higher preference rating among Pune's home buyers than the 'walk-to-work' option, which is unrealistic in most cases, says Arvind Jain, Managing Director of Pride Group.

Arvind Jain

Abroad, a new trend of evaluating neighbourhoods by their 'walk score' is being seen among home buyers. The idea behind this is simple, and in fact the very basis of that favourite real estate mantra 'location, location, location.' And it has great pertinence for the Pune real estate market, as well.

The investment value of a location is traditionally judged by how many office complexes are coming up in the area. This makes sense - investors can expect demand from people who work in these offices, since living close to work is always a great convenience. It reduces the daily travel time, which means one can spend more time at home with one's family than on the road.

However, property buyers look for more than proximity to work when they choose a home. In a city like Pune, where traffic congestion is a huge problem, people also aspire to have various conveniences within walkable distance from their homes.

A housing project's 'walk score' is determined by how many shops, clinics/hospitals, parks, playgrounds, restaurants and coffee shops are within walkable distance. In fact, this factor accounts for a much higher preference rating among Pune's home buyers than the 'walk-to-work' option, which is unrealistic in most cases anyway.

The logic is simple, yet profound. A family's happiness quotient in a housing project does not hinge just on how soon the breadwinner (or, in the case of Pune's every-increasing dual income families, breadwinners) can get to and from work. In the course of any normal working day, there are still family members back at home who need to keep the household running.

Pune is also a city where a significant number of families still include elders, who have their own social and leisure needs. And even for the younger generation, commuting home from work just to face the traffic again to pick up groceries or enjoy a cup of coffee with friends is annoying and draining.

The convenience of having essential goods, services and places of recreation within walkable distance from home therefore ranks high on most Puneri families' wish-list. For families are fortunate enough to live in the central locations, in homes purchased at a time when they were still affordable, this is not a problem. But for the majority of today's generation of home buyers, Pune's newer locations are the only options.

One of the ways out of this fix is the increasing availability of township properties. Most of the large townships are coming up on the city's peripheral locations; this means that property prices in them are more affordable. At the same time, they have high 'walk scores' because they include retail, leisure, healthcare and even schools.

This explains why township properties in Pune are becoming so popular. However, not all townships are created equal. A good township is planned in a manner which allows all residents to access such outlets and facilities on foot with equal ease.  While evaluating a township as the venue for one's new home, it is therefore essential to study the master plan and establish its actual 'walk score'.

Real Estate Investment Advice: Bungalows Versus Flats

Arvind Jain

Assuming that one has the financial wherewithal for this to be an option at all, the question of whether to invest in a bungalow or a flat is indeed pertinent. As always, location plays an important role. In an established area of a large city like Pune, a bungalow costs a lot more than a flat. This means that the rental market for such a property shrinks proportionately, according to Arvind Jain, Managing Director – Pride Group.

However, the income segment that remains can definitely afford to rent such a unit, so demand would remain more or less consistent. Moreover, bungalows in established locations have a high chance of attracting long-term corporate leases.

• Bungalows – Established Vs. Upcoming Locations

Investing in a bungalow in an upcoming location usually involves a lower (though still sizeable) capital investment. The rental yield is lower, but the size of the rental market for such a property increases proportionately. Investment in a bungalow in such a location can make a lot of sense if the area, despite being non-prime, is still well-connected to some of the city’s major economic drivers, such the airport or employment hubs such as IT parks and manufacturing zones.

One major advantage of investing in a bungalow in an upcoming location is that it will gain steadily in value as the area’s profiling in terms of social and civic infrastructure improves. However, regardless of location, the maintenance costs and property taxes involved in a bungalow are a lot higher than those of flats. This long-term financial implication must necessarily be factored while investment in a bungalow is considered.

• Share Of Land

If we set the considerations of location, ticket size and potential rental yield aside, the primary advantage of investing in a bungalow rather than a flat is that one secures more land. In any location, it is the value of land which determines the value of built-up property. Unlike a flat, a bungalow and its compound lock in a significant piece of tangible land. This fact gives a bungalow a higher value in real estate terms. Also, the investor must have a suitably long investment horizon and not be looking for short-term returns.

• Investing In Flats

Flats offer a slightly different value proposition than stand-alone units such as bungalows. In the first place, the share of land that is legally allotted to each flat in a project is much lower than that of a bungalow. The primary value of a flat lies in the space that it occupies, which is why larger configurations such as 3 and 4 BHK attract higher rents.

As before, location will dictate the ticket size as well as rental income. The rental market for flats is much larger than that of bungalows, so finding tenants is easier even if one factors in a certain degree of tenant churn. However, one must ensure that one is investing in a flat whose size dovetails with the median income profile of the location. The highest demand will always be from the locality itself, and from people working in offices and industries close to the area.

Buying a flat whose size puts it out of the largest local demand profile can be a self-defeating and costly mistake. Generally, the 1, 2 and 2.5 BHK configurations are the safest investment bet in any area, since the rental demand for them is always the highest. With ultra-premium flats as a logical exception, maintenance and property tax for apartments is significantly lower than for bungalows.

• Flats – Established Vs. Upcoming Locations

In terms of location, investors into flats must consider all the pertinent factors carefully. Flats in established locations are costlier and involve a higher capital expense. They will attract rental interest from a segment of higher economic profile. However, it must be borne in mind that capital appreciation of flats in centrally located projects is slower than in many upcoming areas. This is because high-end locations tend to hit an appreciation plateau, which can persist for long periods.

Upcoming locations appreciate faster because their market viability is being enhanced with increasing accessibility as well as social and civic infrastructure. They attract more people, since any city’s growing population tends to move into areas which are affordable. For that reason, emerging locations also tend to attract a lot of commercial establishments – which further boosts the residential segment.

To ensure that growth factors such as assured infrastructure and social amenities are indeed locked into place, investors into apartments should ensure that they choose projects that fall within the local municipal limits. If a project falls outside the city's corporation limits, there is no guarantee that the location will receive proper infrastructure such as roads and regular water and electricity supply. Without such infrastructure, a location does not appreciate – thereby rendering it unsuitable for smart property investment.