India’s residential property sector, by far the largest amongst the nation’s property classes, has begun the march towards recovery as home prices across the country have shown signs of stability and growth, according to an in depth report into the real estate market.

But developers and investors have for too long focused on markets in the northern and southern regions of India while ignoring the opportunities in the central region of the country, says the report, Residential Opportunities in Central India, from Jones Lang LaSalle Meghraj.

It looks in detail at residential markets in 10 cities in what is known as Central India. The report provides an analysis of the states of Rajasthan, Madhya Pradesh, Chhattisgarh, Orissa and Jharkhand.

It says that demographic and economic fundamentals continue to favor smaller residential markets in India. ‘Across markets all markets in the country, demand for residential units will continue to be driven by growing populations, rising incomes, increased urbanizations, and a shift towards nuclear families,’ it says.

‘Smaller markets, particularly those that have been underserved by national developers, will present increased opportunities due to the relative affordability and availability, along with unmet demand arising from an increasingly sophisticated set of consumers,’ it adds.

Those markets with a combination of relatively higher levels of affluence and lower residential capital values, such as Indore, Udaipur, Cuttach and Bhilai, are predicted to be poised for growth over the medium term.

The report also points out that while local developers do exist in smaller markets, they do not necessarily have the expertise, financial strength or trusted name brand that national developers can offer in India’s opaque residential sector.

But national developers need to take account of the variances in each local real estate market to maximize the returns on their projects. ‘These can include governmental regulations, consumer preferences, purchasing power and operational strategies,’ the report says.

Pioneering developers such as Entertainment Word Developers, Omaxe and Sahara City have already entered Central Indian markets, which are amongst the most under served in the country, it adds. ‘Others will undoubtedly try to follow as these leaders demonstrate the viability of their market strategies, a fact that bodes well for consumers and the industry as a whole,’ the report concludes.

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