Bengaluru, Hyderabad & Pune score high as the most favourable real estate markets amongst the top 6 Indian cities
According to the Real Estate Investment Metric (REIM) framework of Motilal Oswal Financial Services Limited (MOFSL), Bengaluru emerges as the most favourable market on the overall demand-supply dynamics. The city secured a score of 4.7 on the framework.
Hyderabad stands second with a score of 4.0 on REIM framework. It is the fastest growing market with strong pricing outlook and the lowest inventory overhang.
| Weightage% | Bengaluru | Hyderabad | Pune | MMR | NCR | Chennai | ||
| Launch discipline | 15 | 5 | 1 | 4 | 3 | 6 | 2 | |
| Demand growth | 25 | 5 | 6 | 3 | 4 | 2 | 1 | |
| Inventory overhang | 20 | 3 | 6 | 4 | 2 | 1 | 5 | |
| Pricing outlook | 25 | 6 | 4 | 5 | 3 | 2 | 1 | |
| Competitive Intensity | 15 | 4 | 1 | 2 | 3 | 5 | 6 | |
| Weighted rating scale | 100.0 | 4.7 | 4.0 | 3.7 | 3.1 | 2.9 | 2.7 | |
| Equal weighted rating | 100.0 | 4.6 | 3.6 | 3.6 | 3.0 | 3.2 | 3.0 |
Note: Higher the rating, better it is
MOFSL assigns higher weightage to companies exposed to markets like Bengaluru and Pune, given the prospects of comparatively higher volume and pricing growth.
Mumbai MMR is the most balanced across the criteria defined under the REIM framework.
National Capital Region gains preference only for its launch discipline, as it is the best among other markets, and low competitive intensity. Given the inventory overhang and loss of trust among customers, demand and pricing advantage will be centered for fewer players in the market.
Motilal Oswal Financial Services built a REIM framework to gauge the attractiveness of the top six Indian real estate markets. The framework assigns a rating on a scale of one to six (with six being the highest rating) to each market, based on how they compare with five other markets on the said criteria. Following are the key criteria of the framework:
· Launch discipline: Expected scale of launches v/s demand
· Demand growth: Potential for demand growth based on demographics
· Inventory overhang: Extent to which current inventory levels affect the pricing outlook going forward
· Pricing outlook: Markets conducive for price hikes on the basis of existing inventory levels, demand growth, and competitive intensity
· Competitive intensity: Nature of competition in the region and control of the top 10 players in the market
