Shifting Population towards Suburbs Leads to Realty Growth

While major metros such as Mumbai, Delhi and Bengaluru have been attracting high population density due to their growth and employment opportunities, there is also an increasing trend of the population moving towards suburbs and outskirts of these cities. While there are several factors driving this population shift towards the suburbs and neighbouring cities, the realty sector in these areas is witnessing a growth.

Population shifts towards suburbs

According to the latest study conducted by the Mumbai-based International Institute of Population Sciences, the population within Kolkata, Mumbai and two inner districts of Delhi have shrunk, while Hyderabad and Chennai have seen minor increase between 2001 and 2011. However, the suburbs and outskirts of these cities are witnessing a growth in population. The only major metro that has seen a significant population increase in both urban and suburban areas is Bengaluru.

According to data, Mumbai witnessed a decrease of 8 per cent, Kolkata witnessed a decrease of 2 per cent and New Delhi witnessed a decrease of 21 per cent in population. Central Delhi witnessed a fall of 10 per cent in population. At the same time, Mumbai suburban areas witnessed a growth of 8 per cent, while Thane witnessed a growth of 36 per cent and Raigarh witnessed a growth of 19 per cent in population. In Kolkata, the North and South 24-Paraganas witnessed a growth of 12 and 18 per cent respectively while Hooghly witnessed a growth of 10 per cent and Howrah witnessed a growth of 4 per cent in population. In Delhi, the southwest, northwest and north-eastern regions witnessed a growth of more than 25 per cent each, while Gurgaon witnessed a growth of 73 per cent, Faridabad witnessed 33 per cent, Ghaziabad witnessed 41 per cent and Noida witnessed 49 per cent growth in population.

In major metros that witnessed growth in the city’s population, Bengaluru and Chennai witnessed the major growth. While Bengaluru urban witnessed 47 per cent growth, the rural area witnessed a growth of 17 per cent. While the central part of Chennai witnessed 7 per cent growth, Kancheepuram witnessed 39 per cent and Thiruvallur witnessed 35 per cent growth.

This shows a significant migration of population towards the outskirts and suburban regions of these cities.

Factors driving population

There are a number of factors driving the population towards the suburbs of cities, especially Mumbai, Delhi and Bengaluru.

1. The first major factor is the increasing housing costs within the city limits. Property values within city limits have gone beyond the affordable range, while property values in the outskirts are more affordable. For example, the average property value in South Mumbai is approximately Rs 50,000-70,000 per sq. ft. while it is approximately Rs 15,000-16,000 per sq. ft. in the most posh areas of Navi Mumbai.
2. Low costs and growing infrastructure as well as connectivity are driving significant population towards the suburbs. For example, the Hebbal flyover and the Trumpet Flyover have significantly reduced the commute time between Bengaluru and Yelahanka to about 10-15 minutes.
3. The growth of CBDs and SEZs on the outskirts of the cities have led to a good population of working class that wants to settle down near office spaces. For example, the NCR region in Delhi, Electronic City and Whitefield in Bengaluru, and Andheri, Bandra as well as Belapur in Mumbai suburbs and Navi Mumbai have seen significant increase in population.
4. The outskirts still give peace of mind as well as green cover, which most people prefer. As a result, there is a growth in certain sections of population in these areas.

Population migration boosts realty

The growth in migrant population from the central parts of metros towards the suburbs and outskirts have already led to a boom in the realty markets here. These suburbs have the basic necessities that drive a good resident population to these areas. As such, they have witnessed a huge growth in residential projects. Especially, South Indian cities such as Bengaluru and Chennai have witnessed a good number of project launches due to their affordability. At the same time, property values too have been witnessing an upward trend in most suburbs. For example, Ghaziabad, Greater Noida and Faridabad in Delhi are emerging as new cities. Thane and Navi Mumbai regions near Mumbai as well as the eastern and northern regions of Bengaluru are witnessing significant growth.

One can see that, with a shift of population from the central regions of the major metros towards the suburbs, there is a significant growth in the real estate sector of these regions.