Nagpur Real Estate Boom: Doubling Apartment Sales Post Covid-19
The Nagpur real estate market has experienced a remarkable surge in residential property sales in the primary market post Covid-19. According to data from Liases Foras, a leading real estate research firm, the number of apartments sold in the orange city has nearly doubled, soaring from 1,389 to 2,211 in the fiscal year 2023-24, up to January 2024.
Evolution of Sales in Nagpur
In the preceding years, the primary market sales depicted a steady rise. In 2019-20, there were 1,383 sales with a value of Rs 486.32 crore, which increased to 1,563 in 2020-21, reaching a value of Rs 539 crore. The upward trend continued with 2,332 sales in 2021-22 (valued at Rs 833 crore), 2,543 in 2022-23 (with a value of Rs 1,207 crore), and finally, 2,211 in 2023-24, accumulating a value of Rs 1,257 crore.
Understanding the Primary Market
The primary market involves homebuyers purchasing directly from a developer, either in an under-construction or ready-to-move-in apartment. In contrast, the secondary market pertains to the acquisition of resale properties from homeowners upgrading or investors exiting their investments.
Unsold Inventory and Escalating Costs
While primary market sales have surged post Covid-19, the unsold inventory has concurrently risen from 11,556 units in 2019-20 to 14,300 units in January 2024. The value of unsold units in 2019-20 was Rs 4,125 crore, escalating to Rs 6,605 crore in January 2024 for the increased number of unsold units. Additionally, the average cost of an apartment in Nagpur has witnessed a five-year increment from Rs 35 lakh in 2019-20 to Rs 46 lakh in 2023-24.
Driving Factors Behind the Surge
“Post Covid-19, property sales and registrations in the Mumbai real estate market doubled, experiencing robust growth. This trend is mirrored in the Nagpur real estate market, which is not surprising. The pandemic prompted significant migration towards tier-2 and tier-3 cities, driving demand for residential, commercial, and retail spaces,” explains Pankaj Kapoor, Managing Director at Liases Foras.
Aditi Sirsikar, Director of Sirsikar Developers & Builders Private Limited, notes a notable shift post-Covid as many young individuals returned to the city or embraced hybrid work arrangements, allowing remote work. This influx of young talent has sparked a socio-economic evolution in Nagpur, creating a vibrant hub for investment and development.
Shift in Demand for Apartment Types
Developers highlight a shift in demand, with the majority now leaning towards 3&4 BHK apartments, while 1 and 2 BHK units take a back seat post-Covid-19.
There are two key reasons behind the doubling of sales in Nagpur’s real estate market post Covid-19. Firstly, the city has witnessed significant infrastructure development in the last five years, including the Nagpur Metro rail, road expansions, and flyovers. This has not only simplified life but also stimulated business activities. Secondly, during the pandemic, many youngsters who were in cities like Mumbai, Pune, and Hyderabad returned to Nagpur during the lockdown and chose to stay,” explains Kishore Kanhere, Founder and Chairman of Ankit Construction.
“Moreover, this influx of young population back to their hometowns has resulted in a decreased demand for 2 BHK apartments, coupled with a surge in demand for 3 and 4 BHK units. The majority of homebuyers fall in the 30 to 45 years age group, and as they shifted back, commercial and retail businesses also experienced a significant boost. Malls that were once running in losses pre-Covid-19 are now thriving, with four to five prominent malls in the city generating substantial revenue,” he adds.
The surge in apartment sales in Nagpur’s real estate market post Covid-19 is a testament to the city’s resilience and attractiveness as a thriving investment destination. The confluence of infrastructure development, demographic shifts, and economic growth has positioned Nagpur as a promising hub for real estate.
FAQs
1. What is the primary market in real estate?
The primary market involves purchasing directly from a developer, either in an under-construction or ready-to-move-in apartment.
2. How has the average cost of apartments in Nagpur changed over five years?
The average cost has increased from Rs 35 lakh in 2019-20 to Rs 46 lakh in 2023-24.
3. Why did demand shift towards 3&4 BHK apartments post-Covid-19?
The influx of young population back to their hometowns resulted in decreased demand for 2 BHK apartments and increased demand for larger units.
4. What factors contributed to the surge in real estate sales in Nagpur?
Infrastructure development, demographic shifts, and the return of young individuals during and post-Covid-19 lockdown contributed to the surge.
5. How has the unsold inventory changed in Nagpur?
The unsold inventory increased from 11,556 units in 2019-20 to 14,300 units in January 2024, with the value rising from Rs 4,125 crore to Rs 6,605 crore.
