DELHI NCR REAL ESTATE’S SIGNS OF REVIVAL
If the number of launches is any indication, the residential real estate of Delhi-NCR is showing the much-awaited signs of recovery.
TEXT: SREYASI MAITY
The current growth in the residential market across the country has been credited to the confidencebuilding measures undertaken by the government as well as the developers. This has created a favourable environment for increased buyer’s activity in the mid-income and affordable projects and to some extent in the luxury segment as well. Delhi NCR market especially, till a few years back driven by investors is now completely an end-user market. The stabilization of prices post RERA and GST have ensured the return of the self-use buyers to the market.
Manoj Gaur, MD, Gaurs Group & Chairman, Affordable Housing Committee, CREDAI said, “The realty sector which was going through a rough patch is on the path of recovery and now, with the recent GST rate cut in affordable and underconstruction properties, it is contemplated of the sector to burgeon in the long run. With the recent rate cut, the realty sector is anticipated to get a boost as the demand for residential properties will experience a boom in the sector. The government’s agenda to push affordable homes was also visible in the decision to reduce GST to a mere 1 percent for the segment thereby lowering the tax burden on home buyers.”
REASONS FOR NCR REVIVAL
Demands of people are changing as they are becoming more aware of the market with North India real estate offering some lucrative opportunities for buyers. Pradeep Aggarwal, Co-Founder & Chairman, Signature Global and Chairman – ASSOCHAM National Council on Real Estate, Housing and Urban Development focusing on the NCR market said “Market is gearing up to work towards the new business opportunities emerging out of the latest needs of the people in commercial and residential segment. Additionally, multiple sops by the government have led to an increase in supply in the first quarter itself. It is estimated that sales have risen by 12 percent and supply by 27 percent if we compare it with the same period of previous year. I the affordable housing segment, the NCR region is on top in the number of units added, accounting for 30% of the total supply in major cities.”
Noida has emerged as a place that provides housing to all including affordable segment, luxury segment, and farmhouses. The outlook for Noida real estate is promising as almost all the projects that are launched are lapped up immediately. The infrastructure is good and then expansion of metro is taking place which will increase the demand.
NRI INVESTMENTS AT HOME
Growing economic environment and improving infrastructure are the reasons that NRIs are looking towards their home country. Another aspect is that they are now confident because of the regulatory reforms and improving transparency in the realty sector. The sale has picked up pace after slew of buyerfriendly measures.
Deepak Kapoor, Director, Gulshan Homz focusing on the reasons for the upswing of the NCR market said, “Especially the NRIs living in the Gulf and the US are back with zeal as property prices are rationalised and favourable policy reforms by the government. The latest trend in NRI investment is the interest in affordable and mid-segment housing, which is happening due to government incentives and the demand for such houses that gives assured rental income.” “As 100 percent FDI in construction development and REITs is now allowed, the real estate sector is set to get more interest from the NRIs. Developers are also geared up to tap into the newer asset classes that are emerging in North India, such as co-working and coliving.” agreed Dhiraj Jain, Director, Mahagun Group
CHALLENGES & GROWTH
The NCR real estate market which has been seeing many challenges of late. The region’s major commercial and private hubs have now come to their absorption points. Low investor interest and inventory stock overhang has captured the development. There has been a lull in costs since 2013 and the situation has not changed ever since, the report included. The region in any case seen a drop of 15 percent within the unsold stock in comparison to 2018.
percent within the unsold stock in comparison to 2018. According to the industry report, the residential market in NCR showed a revival in demand in lower ticket sizes and affordable segment, specifically in Greater Noida and Ghaziabad. As per industry estimates, there are 45,000 properties in this segment near to completion or to be completed in next couple of years.
This year housing sales have appeared to rise as Delhi- NCR real estate players are on a spree for the completion of projects. Infrastructural improvements and modern metro lines are taking buyers to more affordable micro-markets within the region, which were earlier shunned. The motivating forces of bringing down the GST rates and infrastructure status to affordable housing from the government have fuelled up the demand within the segment especially in the areas of UP, Haryana and Punjab bordering Delhi.
The positive sentiment will carry forward for the rest of the year is what the industry experts expect. Sales have shown a considerable increase in major cities and that holds true of NCRas well. Dhiraj Jain stated, “In fact, 84 percent of the total sales in Q1 has been from Bengaluru, MMR, Pune and NCR. Having said that, there are certain things that still need some work to make the sector work smoothly. In terms of RERA there are penalties on developers for delays but the regional authorities should also be made accountable.”
Looking at the figure of unsold stock, which has diminished in Q1 2019, it is evident that the certainty within the market is at an all-time high due to the steps taken by the government. For homebuyers, the torment point was the delivery of projects which is presently progressing after the RERA factor has kicked in recently. The Delhi-NCR real estate market will recover soon develop and it is reflected within the truth that unsold stock is exceptionally less as compared to other parts of India.
MOVERS & SHAKERS
- Expansion of metro grid – the inauguration of the Delhi-Meerut Expressway Phase I and the upcoming Jewar International Airport will bring in fold new land parcels and more availability of affordable homes.
- With rise in demand for homes in Rs 40 lakh segment, the beneficiary markets will be Noida, Greater Noida and New Gurugram.
- Delivery of over 60 percent delayed units in Ghaziabad. Have been a a real confidence booster for the North India realty market.
- To rationalise home prices, circle rates in Gurugram have been increased by 15-20 percent, causing a spike in property rates in the area.
- Faridabad Development Plan–2031 will infuse life in the quasi industrial city’s realty market.
- Completion of the Dwarka Expressway will bring Delhi closer to suburbs, providing some relief to the saturated Delhi market.