Chapter -03
Overview of Real
Estate Sector in
Lucknow
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3.1.0 Real Estate Sector in Lucknow
Researcher has founded the key scope where the research should
proceed by the help of literature review. But it will become more
important to study the real estate scenario of Lucknow. Lucknow
is in the centre of Uttar Pradesh and also the capital of the state.
Lucknow, the State capital of Uttar Pradesh state is also known as
the city of Nawabs. The city has a diverse culture and has emerged
as one of the fastest growing non-metropolitan cities in India.
Located in the central eastern region it is the second largest city
within the states of northern India. The city is circumscribed by
the Barabanki district in east and the Sitapur district in the north.
Lucknow city is divided into two regions i.e old and new Lucknow
based on its geographical location and development history. Old
Lucknow is adorned with old architecture, with major part of Old
Lucknow being dotted with unplanned residential developments.
The area is flooded by the handicraft factories of Zardozi and
Chikankari. On the contrary the trans-Gomti region is known as the
New Lucknow. Central part of Lucknow (i.e around Hazratganj) has
certain prime localities like Hazratganj, Aminabad, Husainganj, Lal
Bagh, Golaganj, Wazirganj etc. to name a few. These places though
developed at a much later stage have well-planned roads, modern
architecture with organized social infrastructure.
Real estate overview
The city has witnessed a radical growth along the Faizabad Road,
Sultanpur Road, Raibareli Road, Kanpur Road and State Highways,
providing a doorway to new localities on the real estate development map.
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arket is majorly driven
by the end users. Whereas, the participation of the investors is
approximately 35% to 40%, which is expected to escalate in the future.
The real estate market is driven by the bureaucrats, politicians,
public/government servants, emerging IT/ITeS industry and other
natives of nearby cities & eastern Uttar Pradesh having desire of
another home in Capital, this is only because of good
infrastructure, planned development, good connectivity and
original inhabitants of Lucknow who have now migrated outside.
During last few years, the average price appreciation in certain
localities has been in the range of 10% 15 %, which shows
stability with a slight upward bias.
Various mega projects with world class social amenities by reputed
private developers (Eldeco, Sahara Housing, Unitech, Ansal API,
Omaxe, DLF, Rohtas, Eldeco, Shalimar, Halwasiya and Emaar) have
changed the face of real estate in the city. Compared to other
metropolitan cities, land is available at affordable price, which has
led private developers to venture into the market.
city has transpired in various other sectors as well such as retailing,
manufacturing, medical and IT and as a result has secured its position as
one of the smart cities of India, thanks to a proactive government. Due to
the same, the city has fascinated many developers and homebuyers with
this growth of new infrastructure. There are various reasons, why one
should purchase property in Lucknow. Below are few of them:-
1. Medical and educational infrastructure This city rubs shoulders with the top
metros of India, when it comes to educational and medical infrastructure. With
top schools and colleges, an IIM, an AIIMS equivalent hospital and multiple top
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notch private hospitals, Lucknow offers a peace of mind like no other similar
city in India. The city provides the best environment for a child to engage in
various activities, while studying for a multi-faceted development.
2. Connectivity Lucknow boasts of a modern international airport and a railway
station connected to almost every city in India through an efficient network.
Unlike most other cities, both these places have excellent connectivity with
rest of the city. The Shaheed path connecting to airport from the developed
areas of the city is a testimony to the foresight of city planners.
3. Recreational facilities Lucknow has many places to spend a day either in complete
relaxation or by engaging in an activity one likes. Two cricket stadiums in the city,
with the latest one, Atal Behari Vajpayee stadium even hosting international cricket
matches, have brought the most played game in India to its residents in a
spectacular fashion. The museums, cinema halls and a host of other such facilities
ensure that one never feels lack of recreation options in this city.
4. Lucknow Metro Every city in India has faced chaotic traffic as it grew.
Lucknow, however, escaped this due to visionary planning of
infrastructure agencies. The metro rail work was started ahead of time
and resulted in being ready when the city would have faced challenges
of traffic. It makes moving around in the city very comfortable.
5. Modern Retail Lucknowites have adopted to modern retail like fish to
water. Latest malls like Phoenix Pallasio, Crown Mall and other previous
malls had attracted and introduced people to the best local, national and
international brands. The ubiquitous fashionable city dweller, mixing with
the people in traditional attire make this city as lovely as one could get.
Lucknow real estate has seen a drastic change in the last 15-20 years. Lucknow
real estate market has grown very fast in the last 2 decades. Property prices in
Lucknow are increasing rapidly from last many years. Many developments in the
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city have taken place which is making it a big metro city of the state
of Uttar Pradesh.
The growth and development of Lucknow in the last few years
which are given as under;
Lucknow is the capital city of the fourth largest Indian state
and is one of the fastest-growing cities in India. With
burgeoning manufacturing, commercial and retail segments, it
has become a preferred real estate destination.
It is estimated that the Lucknow residential real estate market is
driven by a 60:40 mix of investors and end users respectively. The
preference for plots is relatively higher in comparison to residential
units, but currently, the availability of plots is low in Lucknow as the
Lucknow Development Authority (LDA) and Uttar Pradesh Housing
and Development Board have been developing residential units.
The most sought-after segment in terms of demand in the Lucknow
real estate market is the end-user driven segment for ready-to-
move-in residential units in the price bracket of INR 30 50 lacs.
Major infra and institutional projects such as the Lucknow Metro, IT
City being developed by HCL Technologies, Atal Bihari Bajpyee
International Cricket Stadium, Indian Institute of Information and
Technology (Lucknow) and the 1,000-bed Medanta super-specialty
hospital has st
dotted with old cramped developments. However, New Lucknow
which has emerged only a few decades ago is replete with
planned development and adequate social infrastructure.
The market is driven by bureaucrats, politicians, government officials,
private sector employees, and original inhabitants of Lucknow, who have
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now migrated outside, yet wish to have a base in Lucknow. Huge
demand also flows in from surrounding cities on account of
aspirations to enjoy better amenities and opportunities.
The realty market of Lucknow has been witnessing robust real estate
activity along Shaheed Path which lies between Kanpur Road and
Faizabad Road. It is flanked by the active micro-markets of Vibhuti Khand,
Gomti Nagar Extension, Vrindavan Yojna, 3500-acres Ansal-API township
Sushant Golf City, Omaxe Integrated Township, Shalimar One World,
growth corridors on the real estate development map, especially
along the highways that connect with the neighbouring cities of
Kanpur, Rae Bareli, Hardoi, Sitapur, Faizabad, and Sultanpur.
The organized retail market activity has paced-up in the city,
especially in the last few years. The Mall culture is now well adapted
in Lucknow, there are at least 11 operational mall i.e. Sahara Ganj,
Wave Mall, Fun Mall, Singapore Mall, City Mall, Phoenix United Mall,
One Awadh Mall, Garden Galleria Mall, Umrao Mall, Crown Mall and
Phoenix Pallasio Mall. A major giant into retail has also entered in
the city on Shaheed path, LULU Mall.
History Of Organised Real Estate Market Of Lucknow
Old Lucknow is fraught with old architecture and a major part of Old
Lucknow is dotted with unplanned residential developments. The major
done by both Public and Private sectors.
Initially Awas-Vikas (Housing Board) and LDA had taken the
responsibility of development of Lucknow and Rajajipuram and
Indiranagar was developed by Awas-Vikas. After this a private player
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ELDECO entered into this market and developed various
group housings and commercial projects.
Soon after Ansal Housing was the second private player to
enter into the Lucknow market and started the development of
Ashiyana Project based on PPP model.
With time LDA has done massive development and portrayed New
Lucknow by its Aliganj, Mahanagar, Vikasnagar and Gomtinagar
projects. The huge demand in real estate has attracted various
other national players with their mega projects having world class
social amenities like Sahara Housing, Unitech, Shalimar, Ansal API,
Omaxe, DLF, Rohtas, Eldeco, Halwasiya, Emaar and many more.
Current Trend Of Real Estate In Lucknow
Lucknow is one such market that has continuously shown an
upward moving graph for residential properties in all major
localities of the town. Considering this, study of price trends
could be a great starting point while zooming in to decide where
to buy a property and price trend charts for Lucknow suggest a
highly positive propensity to buy a residential property here.
Increase in property prices has been remarkably positive and has
touched almost a 10% year-on-year increase in certain localities.
The neighbourhoods which have seen the highest annual
appreciation in property prices are Gomti nagar, Gomti nagar
extension, Sultanpur Road, Kanpur road and Raebareilly road.
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It is also important to note that Lucknow market offers excellent
opportunities to buy in certain localities which are in and around Gomti
nagar, Sultanpur Road, and Raebareilly road areas. Considering few
good properties on offer in these areas and a favourable disposition to
own these, it presents an excellent opportunity to invest here.
There was suppression on cash transactions due to certain policies of the
government in the past, which had badly hit the property sector adversely
in short run. However, this forced more transparent buying and selling of
property. Such measures always help improve the customer confidence
and thus resulting in more customers getting encouraged to invest in
property. RERA has been one of the most proactive regulator body. This
is another measure which has helped improved customer sentiment.
While this had a negative impact initially, as builders and customers were
trying to understand its implications, RERA is expected to give new
impetus to property market.
Lucknow as a market has emerged as a popular choice for
multiple real estate players to offer residential properties. There
has been consistent improvement in infrastructural facilities in
the city. All these factors are sure to support the structural
expansion of residential property market of Lucknow. While
property market is looking at a bright future, the expectation of a
high growth regime is looking a certainty on the Indian horizon.
The structural demand for housing in India will continue to flourish in
many years to come. A population which is still very young with majority
of them just entering the employment creates ample requirement for
housing. Various government incentives like Income tax waiver on one
side and interest subsidy for small dwellings on the other are enticing
buyers. While historically 45-50 years was the age when people typically
bought property, with various incentives and increasing incomes is
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expected to push people in early 30s and 40s towards buying
their own home.
The city has conceived most of the development in the state. Infrastructure
development in the city beautiful. From the historical aspect the city has so
many beautiful heritage sites. Modern public infrastructure in the form
eople across the country.
Researcher has tried to make physical survey of the residential
sites of different developers. A part from the physical information
collection form actual site, researcher has also sought help form
online sources. Including the latest sources, the researcher would
like mention the online website for collecting information. The web
sites for property search can be listed as following:
1. www.99acers.com
2. www.magicbricks.com
3. www.housing.com
4. www.Commonfloor.com
5. www.makaan.com
6. www.nobroker.in
7. www.proptiger.com
8. www.propertywala.com
9. www.nestoria.in
10. www.nestaway.com
These websites are not only helpful for researcher but consumers can
compare and find their expected property with the help of the above.
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Researcher has also observed that listing the property on these websites
are also becoming a part of marketing strategy of real estate developers.
Researcher has found that Facebook and other social media
platform are also playing a critical role in the marketing of real
estate products. Researcher has conducted a survey among 90
agents or sales persons form those sites where he visited. The
objective of the survey was to identify key trends in the sector.
The researcher has asked the agents opinion about 15 factors
that may affect the consumer buying and marketing pattern of
real estate marketer. The 15 factors are as follows:
1 Bank Loan facilities
The marketer feels that most important feature that attracts a customer is
negotiating at first point of project approval with any
nationalize bank. The obvious reason behind it is resale value
of the property is high if the project is approved by any bank.
2 Digitalization of marketing space
Most of the products are available online now a days. These products
vary from a FMCG product to a car. Marketing has been changed over
a period. The marketing efforts are now based on internet so chances
are high that real estate marketing remains same.
3 E-marketing
In digital market space e-mail, chat bots, web-based massages are also
important. Researcher has tried to find out the impact of E-marketing on
real estate sales. Now a days the companies are also providing apps that
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can give 360-degree visuals of any project. A customer may feel
convenient while buying if he can view the project pre hand.
4 e-Stamp duties
The earlier real estate market was full of manipulations. For
tax avoidance real price of properties were manipulated.
Chances of fraud were high. But e stamp duty collection has
made a remarkable change. Researcher has tried to know that
whether this practice has affected marketers in real estate.
5 Introduction of RERA
Delay in possession, manufacturing error, mis
communication and false offers were very common attribute
related with real estate. After regulatory change the marketing
has also changed in real estate. Researcher has tried to get
feedback for impact of RERA in real estate marketing.
6 Celebrity endorsement
Most common way to impact buying behavior is celebrity endorsement
and researcher has tried to see its applicability in real estate market. In
Lucknow, cricketer R P Singh endorse a real estate venture. At national
level cricketer Bret Lee use to promote real estate property. The present
research tried to know that does celebrity endorsement plays any role in
the marketing according to the actual real estate marketer.
7 Proximity to facilities (schools/hospital)
Researcher has tried to know that does the location of project
affects the real estate marketing.
8 Demonetization
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Real estate business was one of those businesses where cash played
major role. Most of the transactions were made in cash to avoid
taxation. Suddenly demonetization made it difficult to operate in cash-
based markets. Researcher has tried to know about the effect of
demonetization on marketing efforts of real estate businesses.
9 Brand Image of Builder
Does buyer wish to pay for brand? It is the most important question in
the mind of marketers. Those who pay enough weightage to consumer
behavior, must focus upon their reaction to brand image. Researcher has
tried to know the impact of brand in real estate marketing. Response of
agents will be able to demonstrate whether the real estate buyers go for
brand image of property are the still influenced by basic features.
10 Property search Websites
99 acers, magic bricks and other similar websites also affects
the marketing efforts of real estate business.
11 Influencer marketing
Now a days most empathic tool for knowledge gathering is
you tube. People seek information form social media
influencers and experts. In such case researcher has tried to
know that whether it pays in real estate marketing or not.
12 Outdoor marketing
We can easily see outdoor hoardings and marketing banners of real
estate businesses. Researcher has tried to know that whether they
actually pay or just remain a compliance like any other business.
13 Reference from Existing Buyers
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Does word of mouth pay in real estate? Researcher tried to
explore the issue in present research.
14 NGT interventions
Last few years it has been observed that the real estate sector
has been instructed to shut down its operations on the behalf
of environmental issues. Researcher tried to explore the
impact of NGT interventions on marketing.
15 Agents Selling Skills
Last but not the least a sales man can turn the table with his
salesmanship. Does it work in real estate? Researcher has
addressed the issue in present research.
Table 1: Response pattern and analysis
Df (degree chi-square
of value at chi-square
Sr. No. of
Observed freedom) 0.05 level value for
No observation
indices for of observatio
. s
observatio significanc n
n e
Bank Loan
1 90 2 5.991 14.466
facilities
Digitalization of
2 90 2 5.991 1.266
marketing space
3 E-marketing 90 2 5.991 4.999
4 e-Stamp duty 90 2 5.991 6.199
Introduction of
5 90 2 5.991 21.666
RERA
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6 Celebrity
90 2 5.991 2.599
endorsement
Proximity to
facilities
7 90 2 5.991 6.066
(schools/hospita
l)
8 Demonetization 90 2 5.991 7.200
Brand Image of
9 90 2 5.991 9.866
Builder
10 Property search 90 2 5.991 13.066
Websites
Influencer
11 90 2 5.991 3.266
marketing
Outdoor
12 90 2 5.991 3.466
marketing
Reference from
13 Existing Buyers 90 2 5.991 11.4
NGT
14 90 2 5.991 0.866
interventions
Agents Selling
15 90 2 5.991 4.066
Skills
Researcher has found that Bank Loan facilities, e-Stamp duty,
Introduction of RERA, Proximity to facilities (schools/hospital),
Demonetization, Brand Image of Builder, Property search Websites and
Reference from Existing Buyers are crucial for rea; estate marketers.
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