Published: July 19, 2014 1:27:19 am
‘Upcoming location’ is a term frequently used in property advertisements or discussions to refer to areas that are currently lesser-known, but touted as future prime real estate markets. Typically, such locations suddenly sprout many projects and get positioned as the ‘next best place’ for property purchase because a) they are newly-discovered and therefore, affordable as compared to more established locations; and b) they carry the promise of faster value appreciation.
So whether you are buying property for personal use or investment in a high-potential area, here is a ready checklist for you to follow:
Am I in the right zone?: Often, upcoming locations are situated on the outskirts of cities and may either be under a village panchayat or a city municipal corporation. The town and country planning department often revises the Master Plan to define regions into various classes such as industrial, residential, green zone, or area for social infrastructure. Therefore, it is imperative to ensure that the location of the project is in the permitted category, i.e. that a residential project should be constructed in a zone earmarked for residential use only. Construction in any other zone, until and unless converted for specific use, makes it illegal.
What about public utilities?: The next important step is to enquire whether public facilities such as sewage, drinking water supply and electricity connection will be made available to the project. In larger projects, developers are required to build electric sub-stations, while in other cases, electricity lines have to be drawn from sub-stations. This, along with the No Objection Certificate from the state electricity board, necessitates a great deal of expenditure on the part of the developer. Both can be causes for delays in the delivery of the project. However, if these services are already available to nearby projects, it becomes easier for the developer to attain these services after project completion.
Where do the roads lead?: While the presence of approach roads, main roads and state and national highways is essential, one should also factor in the distance of the location from the railway station, airport and bus terminals. One can search online or enquire from locals about the upcoming infrastructure projects such as proposed Metro stations, flyovers, etc. These can be a useful indicator of the accessibility and convenience of the project, and the appreciation potential.
Essential services: Education, health and entertainment are three essential needs of every family. The presence of good schools, hospitals, shopping complexes and malls in nearby areas makes life comfortable. Check if services are accessible, or will be in place, by the time you move in.
Is it a ghost town?: You don’t want to be staying in a place where occupancy is still in its infancy stage. Therefore, it is wise to visit nearby projects to gauge their occupancy levels. The greater the occupancy, the faster the development of social infrastructure tends to be. Higher occupancy levels create a more conducive ecosystem and basic conveniences such as availability of vegetables, household groceries, dairy products and manpower become easily available.
Ear to the ground: The farmer agitation in Greater Noida and the recent guidelines by National Green Tribunal regarding the eco-sensitive zone around the Okhla Bird sanctuary are examples of the higher degree of risks attached with upcoming locations. Complex land acquisition laws accompanied by the general opaqueness in the real estate sector make customers vulnerable to unforeseen events. Thereby, it is suggested that one talks to locals or other property purchasers in the area to get an understanding of any possible issues that may crop up in the near future.
Commercial activity: The economic development brought by the onslaught of the IT, KPO and BPO sectors in Bangalore, Hyderabad, Chennai, Kolkata, Noida and Gurgaon has been the primary reason for the massive expansion of these cities. Similarly on the industrial front, the announcement of the Delhi Mumbai Industrial Corridor has led to a property boom in cities adjoining these corridors such as Bhiwadi-Neemrana in Rajasthan and the Ahmedabad-Surat-Vadodara belt in Gujarat . Strong commercial/industrial activity can, therefore, boost the capital values of surrounding belts tremendously.
Approaching upcoming properties with an alert mind and ticking items off this simple checklist can go a long way in getting a great property bargain without being exposed to high risks.
The author is President, CRISIL Real Estate Ratings
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
For all the latest Business News, download Indian Express App.