Established vs Emerging locality – where to invest

Established versus emerging locality – which is a better investment for real estate?

The question is a loaded one as it depends on a number of factors such as infrastructure and connectivity. Here’s a guide to help you navigate the pros and cons of both an established and an emerging locality in real estate.

Established Localities: Advantages and Disadvantages

• Safe choice – The biggest benefit of investing in an established locality is its infrastructure. You already know what you’re getting in places like Kolkata as the infrastructure is already developed. Established localities have a solid social and civic infrastructure, and are safe due to steady demand. Moreover, the demand for real estate in an established locality does not falter with a market fluctuation. The risks are therefore lower in established localities.
• Saturation: Since the demand is both high and steady in established localities, most of these places are already saturated. They have a limited supply of land and suffer from a lack of resources. A good example is the city of Mumbai. Since everyone flocks to Mumbai, it is an established locality in real estate. However, the market is saturated and there is a keen shortage of land and other resources.
• High costs: The properties in an established locality come at a much steeper price than an emerging locality. The difference in prices between cities like Vellore and Chennai are astounding. It is particularly difficult for small-time investors to buy real estate in an established locality.

Emerging Localities: Advantages and Disadvantages

• Undiscovered gem: Think of emerging localities as the undiscovered gem in real estate. Most people ignore it because of a lack of patience and knowledge but emerging localities often yield returns higher than an established locality. There is ample land and the prices are much cheaper than in big cities.
• Cheaper properties: Property price is cheaper in an emerging locality. Thus, an emerging locality is an affordable and accessible option for first-time or small investors in real estate. Moreover, some emerging localities promise higher rates of return as compared to established localities as the investment is low. 
• The entry point is low: A big disadvantage of emerging localities is that they are undiscovered. Thus, the entry point in this real estate market is low. Investors generally do not invest in such areas, until they are assured of success. This can act as a deterrent for many, especially first-time real estate investors or homebuyers.
• Connectivity and Infrastructure are poor: The connectivity and infrastructure need improvement in most emerging localities. These two factors are the biggest disadvantage for real estate investors in emerging localities.

The final choice: Established or emerging locality?

In the end, it all boils down to one thing – your reason for investment. Once you have your purpose for real estate investment sorted, it will be easy for you to choose between established and emerging localities. For instance, if you’re in a hurry to settle down, you would opt for a property that is ready, with well-developed infrastructure and connected roads. 

However, if you have time, say a period of 7 years, or if you’re on the hunt for potential in emerging localities like Tier-II cities, then you can opt for emerging localities. Remember that investment does not come with a guarantee so you need to do your homework regardless of your choice in localities.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.