RESURGENCE OF INDIAN CITIES

POST METRO ANNOUNCEMENT

Updated on: June 6, 2016

The success of Delhi Metro paved way for development of Metro Rail in many other cities as well. Availability of Metro makes commuting easy and convenient from one place to other. It now symbolizes the overall infrastructural development of an urban cluster. Infrastructural development has direct impact on rise of real estate market of a location. The objective of this report is to understand the impact of development of Metro Rail on the property market. Does it impact demand of property in a particular location and how direct is the impact? Appropriately, we focused on online trends in various markets where Metro Rail has either become operational or is about to be. We analyzed online search trends in these markets and compared with various phases of Metro Rail development.

1 Bengaluru

The DMRC submitted the

DPR for Phase I of the Namma Metro project to the BMRCL

in May Phase1

approval in April with a 33 km elevated & underground network with

32 stations

Purple line started on 20th

October

Green line started on 1st

March

Target to extend Purple & Green line

and additional Red & Yellow

Lines

2003 2006 2011 2014 2020

Bengaluru Metro Timeline

Property Search Trends

Property Search

increased between 2004 to 2005 with a

positive growth till the

end of 2006

The trend slipped a little

in 2007 and stabilized

afterwards

The next boom in the property searches came between 2012 to 2014 with a slight dip after

that

Currently there is a slump

compared to the previous

high in 2012 to 2014

The Bengaluru property market witnessed a high demand as soon as the construction of the metro route got announced

It was on the peak till the final announcement of construction of the metro route

The final Metro run did not effect the demand much as the searches in that specific phase were quite consistent

2 Jaipur

The Jaipur Metro Rail

Corporation Ltd. was

created on 1st January

Physical construction work started

on 24th February

Trial run of the Metro took

place on 18th September

Current route – Pink Line runs over 9.63 KM and covers 9

stations

Phase 2: Orange Line – 23.099 KM is

targeted to be operational by

2018

2010 2011 2013 2016 2018

Jaipur Metro Timeline

Property Search Trends

The property demand in Jaipur was

stagnant till 2009

It started picking up from 2009

onwards and grew till late

2012

Post 2012 market

maintained the demand but

also witnessed little stagnancy

There is no specific spikes

visible after the launch of

the Metro

It appears that Metro played some role in guiding the property demand and influenced investors who helped it grow at a consistent pace

Yet to analyse the effect of the phase 2 progress report as the market is still growing and is not volatile at the moment

3 Kochi

The Public Investment Board (PIB) cleared the

project on 22nd March

On 28th March KMRL

entrusted the Kochi Metro

project work to DMRC

Foundation date of the

project – 13th September

Construction started on 7th

June

Final trial of Metro is slated

for 7th June

2012 2013 2016

Kochi Metro Timeline

Property Search Trends

The demand was quite consistent

between 2006 to 2008 after that it dipped

to half

Market largely remained

stagnated for some years,

though it saw some spikes in

between

There are little spikes in the

property demand In

2014

Currently there is a positive

growth which can be

attributed to the political

shift

Metro could not guide the property demand in the region

We still have to wait to see the effect of the final trial of metro and its effect on the property demand

4 Hyderabad

Rapid transit started in 2003 itself but it was

not largely successful due to dependence

on the same rail track

Union Ministry for Urban

Development gave its nod for the Hyderabad

Metro Rail Project

The first phase of the project

should be completed by

August

2003 2016

Hyderabad Metro Timeline

2012 2015

Bhoomi Pujan and erection of

pillars for Stage-I and

Stage-II started in April and

June

90% construction

on Line 3 completed by

June

Property Search Trends

The property demand in Hyderabad grew with a

consistent pace till 2013

Post 2013 the demand is still high but have seen a little stagnancy

Between 2010 and 2012

we can see some extra

growth in the overall

demand curve

After the metro announcement the property prices in the nearby locations have seen a massive growth

It indicates that the metro line have eventually boosted the overall property demand in the region but can’ be the only reason for this growth

5 Lucknow

Metro project is cleared by

Lucknow Development

Authority (LDA) in October

An agreement is signed between

DMRC and LDA in February

The state cabinet gave clearance to

the metro rail network in

June

Foundation of Lucknow

Metro project in March

In December, Union Cabinet approved the

construction of Phase I

2008 2009 2013 2014 2015

Lucknow Metro Timeline

2017

The first phase will be

completed by February

Property Search Trends

The property demand in

Lucknow was stagnant till

late 2008 It started

picking up after 2009 and witnessed the major peeks in 2010 and 2012

Post 2012 the property

searches got stagnant but

still continues a good demand

Year 2015 saw a little slump but is again registering a

growth in the year 2016

It seems that the property demand in Lucknow has a direct correlation with the overall infrastructural development in the city and Metro has played an important role to it

The price indicator suggests that the outer peripheral market in Lucknow has got a price boost post the Metro announcement

6 Nagpur

The planning of Nagpur Metro

started

Nagpur Improvement

Trust (NIT) signed DMRC

to prepare the Detailed

Project Report

DMRC submitted the project report

The project is scheduled to be completed

by March

Two routes to be constructed – East-west corridor and

North – South Corridor

2011 2012 2013 2018

Nagpur Metro Timeline

Property Search Trends

The property market in

Nagpur was quite stagnant

till 2011 It got picked up

with some major boost in 2012 and then again attained

a stagnancy

Till 2015, the market has

seen a positive growth Post 2015, it

started dipping and have gone

to the same level as in 2012–13

It seems like the Metro announcement has boosted the property demand in the market but it was marginal in nature

Overall price sensitivity vis-à-vis Metro route has not affected the market much but it has provided the boost to the market at large

Directly or indirectly, Metro has surely contributed to the overall property market either by the growth in demand or by increased property prices

Large cities (by area) get major boost in the property market compared to the smaller cities

Fast paced approvals and construction creates buzz and positive sentiments as compared to markets where it is taking more time to progress in the metro projects

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