Real estate thrives in job-rich cities, exhibiting dynamic price trends impervious to other influencing factors. These trends are intrinsically linked to a location's job creation capacity, fluctuating alongside construction costs and inflation, yet most dramatically in cities boasting abundant opportunities. South Indian hubs like Bangalore and Chennai, alongside Hyderabad and Pune, are outpacing larger metropolises like Delhi and Mumbai in job creation, consequently experiencing superior real estate growth. This surge has prompted Jones Lang LaSalle India’s CEO, Om Ahuja, to predict their eventual surpassing of Mumbai and Delhi in market prominence, also highlighting Gurgaon's parallel ascent.
Previously, Mumbai and Delhi attracted significant rural migration, but this pattern has shifted towards these burgeoning job markets, including Gurgaon. Renowned for IT development, Bangalore, Chennai, Hyderabad, and Pune are poised to benefit from IT companies’ expansion plans. Wipro's imminent launch of a 2.5 million sq. ft. facility and headquarters in Bangalore, expanding upon their existing 31,000-employee campus, exemplifies this trend. Such developments suggest these cities will experience uniquely dynamic real estate growth, causing a paradigm shift in price trends.
JLL India’s Om Ahuja projects that by the end of 2013, the supply of properties below Rs.3000 / sq. ft. will plummet to 8%, drastically down from 43% in 2009. Conversely, the supply of properties between Rs.5,000 and Rs.10,000 per sq. ft. is rising, driven by affordability. However, many real estate investors in these rapidly expanding cities continue to seek properties around Rs. 4000/sq.ft. as their prime option.
"If the situation goes on like this these cities will overtake Mumbai and Delhi." - Om Ahuja, Jones Lang LaSalle India’s CEO