Track2Realty Exclusive: Property analysts across the country refer Coimbatore as a market where the effects of slowdown is least visible. At a time when the other property markets across the country are reeling under slackening demand among other major worries, Coimbatore is proving to be a market where the property transactions are happening at a decent pace.
An outside view on the Coimbatore property market may find it bucking the trend due to various reasons, like local economy doing well, the proliferating Small & Medium Enterprise (SME) sector, infrastructure upgradation, best climatic conditions of South India and, last but not the least, the expat South Indians investing into Coimbatore property.
However, beyond the fact that the Coimbatore market has favourable socio-economic conditions lies the fact that there has been method in the way property market has been developed in this part of the world. If the real estate market in the city is grounded, it is more by design than by default. The developers in the local market are aware of the fact that the rise and growth of the city property market has to be in sync with the affordability index of the city. And hence, most of the launches are happening at a price point where the local demand exceeds the supply.
Even the developers from other markets across the country who are otherwise selling at a higher price point are maintaining this demand-supply equilibrium in the Coimbatore property market. As a matter of fact, even the analysis on the triple measurement yardstick of the growth of the given property market—capital appreciation, rental appreciation and property transactions—Coimbatore may not give the fair assessment if only figure is taken into account without understanding the ground realities which are raw facts.
The fact, however, stand that if Coimbatore real estate market have kept the momentum going in favour, it is more by design than by default. While the property markets across the country have been subdued in the last couple of years, the markets across the city have actually bucked the slowdown blues. Yes, the property prices have not appreciated substantially but then the fact that there have been steady transactions at the right price point is enough to justify how the developers have been prudent in this market.
In terms of rental yields also, the markets across the city, both in residential as well as commercial segment, has been flat but occupiers interest has not gone down by any yardstick. Booming economy of the city and the migration of qualified professionals, particularly in the IT & ITeS segment, are cited to be reasons behind this.
Analysts tracking the Coimbatore market are of the view that the developers in this part of the world are grounded in terms of their project offerings as well. As a result, Coimbatore real estate has been flexible in terms of its marketing strategies and also constantly been innovating to keep the momentum going. And that is the reason why Coimbatore real estate seems to be best placed in today’s turbulent times, something that is a traction point for the developers from across the country.
Raj Kuneru, Regional Head, RE/MAX Rest of the Tamil Nadu maintains that Coimbatore is mushrooming as a corporate hub down South, due to which the realty market foresees a tremendous growth in this city. Apart from this the pleasant climatic conditions and many foreign residents settling in this city makes it a very attractive place for real estate due to which this area is shielded from the slowdown traumas.
“People often ask me how far the marketing innovations of the developers been responsible for the success of Coimbatore real estate. My answer to this is that overall innovation by developers has impacted to some extent. It has not changed the landscape of real estate, but in pockets it has improved the lifestyle,” says Kuneru.
A section of analysts insist that it is the state government’s policies that have helped the real estate sector to keep afloat in times of crisis. However, everyone agrees that the government can only provide a fair and conducive market with its policies, but the game changer moves have been made by the developers themselves. Even after the subvention scheme was withdrawn last year, when many of the realty markets across the country felt the heat, Coimbatore real estate market has been resilient. The fundamental reason behind this has been that that it is still the end-user driven market. Speculators and investors by and large avoid such realistic markets where the property appreciation is not a short term trading business.
Some of the prominent developers who have burnt their fingers in the high priced speculative markets are today entering into this market to reinvent themselves and get afloat in a realistic market. Also, many of the national players are not only learning with the grounded attitude of developers in this market, but carrying home a point to explore such marketing methodology in other markets as well.