[kkstarratings]The real estate market in Delhi/NCR Real Estate market has shown a positive response in previous financial year despite of slowdown. Despite being in the news for all the wrong reasons, the NCR’s residential real estate market remains one of the most stable markets in India. Be it a threat of an oversupply situation, the huge project delays, lack of affordable housing or the ugly land acquisition issues, Delhi/ NCR Property market has recorded a positive response from buyers.
Also, the Real Estate Market of NCR is the largest residential market in the country by sheer volume of residential units launched. Currently, this market has comparatively higher number of units at the launch, construction or delivery stage than all the other five metropolitan cities of Mumbai, Chennai, Bangalore, Kolkata and Hyderabad put together.
Some of the reasons for this are good connectivity, planned infrastructure and availability of skilled manpower, which have become a pull factor not only for international but also domestic companies.
The development authorities have also played an important role by taking up new infrastructure projects that have led to tremendous development. Primarily, it is the IT and ITeS, manufacturing, pharmaceutical units and Banking, Financial Services and Insurance (BFSI) industries, which have been driving the demand for office space in the region and have pushed residential demand to a great extent.
Gurgaon’s residential development is taking place in particular pockets. A major chunk of residential supply lies on the Northern Peripheral Road (NPR), a stretch on the Dwarka Expressway. This area is known as New Gurgaon with residential land use governed by the Gurgaon Master Plan 2021.
The expressway is in close proximity to the commercial and industrial areas of Manesar. Most of the projects in this location are multistorey buildings and fall in the midsegment category. Along with the NPR, some other locations in Gurgaon that have seen major residential supply are the Golf Course Extension and the Gurgaon-Sohna Road.
Due to the limited availability of large land parcels in Noida, group-housing developments have been restricted to newer locations in Sectors 44, 50, 51, 52, 62, 74, 77 and the residential sectors like 93, 94, 137, 143, 150 and 168 on the Noida-Greater Noida Expressway.
Greater Noida West, earlier known as Noida Extension, has also emerged as another important residential market, with a number of residential projects coming up in Sectors 1, 16B, 16C, Tech Zone 4, Zeta I and the Yamuna Expressway.
In Faridabad, locations like Old Faridabad Road and residential sectors on the NH-2 and the Surajkund Road have seen a good residential supply in the last few years. However, newer locations like Neharpar and Sectors 70-89 have also seen a number of project launches, ranging from affordable to high-end residential units.
Ghaziabad, which is one of the big industrial towns in the region, has seen bulk residential supply in Indirapuram, Sahibabad, Vaishali, Vasundhara, Raj Nagar Extension and the NH-24 (Crossings Republik). Most of the projects in these locations are affordable and mid-segment.
Market Picks Up –
Despite the global economic slowdown, the NCR did not see a steep fall in project launches last year.
Ghaziabad has contributed to nearly 34% of the number of project launches in the financial year 2012, followed by Gurgaon and Noida. Nearly 86,000 residential units have entered the market in the financial year 2012.
These were equally distributed over the micro markets of Gurgaon, Noida, Greater Noida and Ghaziabad. Most of the project launches in Noida took place on the Noida-Greater Noida Expressway like Sectors 74, 75, 77, and 150. Some of the big projects launched in this micro market are Supernova by Supertech Developers, 3rd Phase of Uni Homes by Unitech, Antriksh Group by Sports City and Jaypee Greens’s Aman II.
In Gurgaon, the developers have shifted their focus from the Golf Course Extension and the Gurgaon-Sohna Road in Gurgaon to Dwarka Expressway, evident from the number of projects launched in Gurgaon. Majority of the launches took place on the Dwarka Expressway.
Kashish- Manor One, ATS Kocoon, Chintels Paradiso, Shobha-International City, Godrej Summit by Godrej Properties, 106 Golf Avenue by CHD Developers, Gurgaon Greens by Emaar MGF, Unitech South Park, Puri Diplomatic Greens and BPTP Amstoria were some of the prominent projects launched here. Gurgaon shows vacancy levels as high as 39%, since a bulk of the projects has been further added to the Dwarka Expressway in the financial year 2012.
Raj Nagar Extension, in Ghaziabad, has also seen brisk activity in terms of project launches in the financial year 2012. Up to last year, Crossings Republik and Indirapuram were the preferred locations for developers in Ghaziabad.
Developers were able to gauge the pulse of the market and launched more affordable and mid-segment projects than premium projects in the financial year 2012. Nearly 40% of the units launched are in the Rs 25-50 lakh ticket size.
According to a report released by Knight Frank, as of March 2012, nearly 5,00,000 units are under various stages of construction in the NCR market.
About 50% of the forthcoming supply in the NCR market is expected to be ready for possession by 2013, as a bulk of the projects were launched towards the end of 2009 and early 2010. Nearly 57% of the forthcoming supply is in Noida and Greater Noida. Gurgaon constitutes nearly 19% of the prospective supply. Nearly 94,000 units are slated to enter this market by 2015.
Mudassir Zaidi, regional director (north) of Knight Frank, says: “About 78% of the unsold inventory is concentrated in Noida and Greater Noida, due to the start of a number of big projects here, including in Noida Extension.
Noida and Greater Noida are favourable destinations for developers as locations have very good connectivity with Delhi. Even though these locations have a demand for housing from the IT and ITeS companies and residents of East Delhi and parts of eastern UP, the appetite for absorption of such huge supply is still questionable.
The NCR markets like Noida and Gurgaon show a positive outlook as sales have picked up. Even though the quantum of units launched in the NCR market is very high, an analysis shows that unsold inventory will be absorbed two quarters ahead of the completion based on long-term sales velocity at an aggregate level. Property experts believe the RBI’s cut in the repo rates will also have a positive impact on consumer sentiments, as it might lead to a reduction in interest rates for home loans in the near future.
Also, the Noida Extension and Greater Noida micro markets are expected to pick up pace as the land acquisition issues in the area have been cleared. Another positive for the Noida market has been the approval of the Noida-Greater Noida Metro rail project (the link will provide direct connectivity from Noida to Greater Noida, Noida Extension, South Delhi and Ghaziabad), which is expected to provide a fillip to the real estate profile of the region.
Today, with infrastructure developing at a rapid pace, with the Metro connectivity and easy accessibility being a given, the NCR is offering a very good environment for budget buyers. Ghaziabad is a fast growing township with developing infrastructure.
In the southwest, Dharuhera and Bhiwadi are very fast growing micro markets. New industrial developments are taking place in the belt, which offer employment opportunities and hence a renewed demand for housing leading to good rentals, as well as longterm appreciation of capital value.
The hospitality sector dynamics of the NCR, followed by the top six cities of India like Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Mumbai, provides an overview on the performance, growth and outlook of the Indian hospitality industry.
Apart from residential segments, the NCR, with a total room supply of 17,500 rooms, is expected to see the highest fresh hotel room supply in the next five years.
Alok Kumar Upadhayay
Real Estate Professional