FEWER LAUNCHES, HIGHER COSTS

Ap­proval of the Greater Noida Master Plan, and the pas­sage of the land ac­qui­si­tion bill in Par­lia­ment made head­lines this year

HT Estates - - Front Page - Van­dana Ram­nani

Sen­ti­ments re­mained cau­tious across the Delhi NCR res­i­den­tial mar­kets in 2012, largely due to the global eco­nomic slow­down and lo­cal mar­ket con­di­tions. The year was char­ac­terised by few new launches in the NCR, high in­ter­est rates, rise in in­put costs and up­ward re­vi­sion of cir­cle rates in Delhi.

The ap­proval of the Greater Noida Master Plan by the NCR Plan­ning Board in July was per­haps the only bright spot. It added the much-needed zing in the Noida Ex­ten­sion mar­ket, some­thing that was miss­ing dur­ing the fes­tive sea­son in 2011.

The buzz was about...

In­creas­ing sup­ply of in­te­grated town­ships, pri­mar­ily in parts of Gur­gaon, Noida and Greater Noida. The open­ing of the Ya­muna Ex­press­way led to an in­creased mo­men­tum in the re­gion. In Gur­gaon, a num­ber of proj- ects were de­layed due to re­stric­tions im­posed on con­struc­tion work by the Pun­jab and Haryana High Court be­cause of water scarcity.

As for the fes­tive sea­son, de­vel­op­ers re­sorted to outof-the-box mar­ket­ing tech­niques and pric­ing mech­a­nisms to boost sales. Many of­fered mon­e­tary ben­e­fits to buy­ers in­stead of the usual white goods or cars. Gold coins were hot favourites.

Some move­ment was also wit­nessed in the branded res­i­den­tial seg­ment with a num­ber of projects be­ing launched in the NCR to cater to niche domestic and global in­vestors. Th­ese projects were ei­ther de­signed by or had brand as­so­ci­a­tions with na­tional and in­ter­na­tional celebri­ties. Su­pertech’s ORB in Noida, Homestead’s Michael Schu­macher World Tower and Maria Shara­pova Tower in Gur­gaon are some ex­am­ples.

Green build­ings gen­er­ated some in­ter­est thanks to the launch of projects such as 3C’s Gree­nop­o­lis. In­vestors also ex­pressed keen in­ter­est in FDI­com­pli­ant projects such as Ex­pe­rion’s Wind­chants and SARE Homes’ Peti­oles in Gur­gaon.

The land ac­qui­si­tion bill was passed by Par­lia­ment but prop­erty mag­nates were not amused. They crit­i­cised it, say­ing it would in­crease land cost and hous­ing prices.

Chair­man and coun­try head of lead­ing con­sul­tant Jones Lang LaSalle In­dia, Anuj Puri, said de­mand of hous­ing projects would be af­fected in the fu­ture with the pas­sage of the bill in Par­lia­ment. “The cost of land will go up and de­vel­op­ers will pass on the ad­di­tional bur­den to con­sumers. Def­i­nitely, it will af­fect the de­mand if prices go up be­yond the ca­pac­ity of a home buyer,” he added. Cap­i­tal val­ues ap­pre­ci­ated by 15-42% over the last year across mi­cro-mar­kets in the NCR. Th­ese in­cluded Dwarka Ex­press­way and the South­ern Pe­riph­eral Road in Gur­gaon along with the Noida-Greater Noida Ex­press­way mi­cro-mar­kets. Gur­gaon wit­nessed the high­est cap­i­tal value ap­pre­ci­a­tion in all cat­e­gories (30-42%).

Ac­cord­ing to Santhosh Ku­mar, CEO, op­er­a­tions, Jones Lang LaSalle In­dia, res­i­den­tial real es­tate be­haved rather pre­dictably in 2012. The ex­pected correction in prices did not oc­cur, though the rise in cap­i­tal ap­pre­ci­a­tion did slow down sig­nif­i­cantly.

Shveta Jain, ex­ec­u­tive di­rec­tor, res­i­den­tial ser­vices, Cush­man & Wake­field , In­dia, points out that the num­ber of launches in Delhi-NCR de­clined from 2011 by ap­prox­i­mately 25%. A sig­nif­i­cant share of the project launches was con­fined to Noida (ap­prox­i­mately 69%) and Gur­gaon (31%), mostly ca­ter­ing to the mid-in­come and af­ford­able seg­ment. Other mi­cro-mar­kets such as Farid­abad and Ghazi­abad wit­nessed a to­tal of ap­prox­i­mately 8,500 res­i­den­tial unit launches dur­ing the

year. There were com­par­a­tively lower trans­ac­tion vol­umes, though some of the mi­cro-mar­kets clearly out­per­formed the rest.

Gur­gaon’s res­i­den­tial mar­ket per­formed rea­son­ably well in 2012, but the per­for­mance was not uni­form across all ar­eas. There were high lev­els of un­sold in­ven­tory in some parts of the mi­cro mar­ket. Golf Course Road, Golf Course Ex­ten­sion Road and Sohna Road achieved rea­son­able ap­pre­ci­a­tion in both cap­i­tal val­ues and rentals. Th­ese re­gions can be clas­si­fied as the best per­form­ing pock­ets in Gur­gaon for 2012 in terms of sales vol­ume and ap­pre­ci­a­tion achieved.

Dwarka Ex­press­way also did well. Its prox­im­ity to the in­ter­na­tional air­port and the pro­posed diplo­matic en­clave re­sulted in price ap­pre­ci­a­tion and high sales vol­umes in the area this year. Projects that were launched at R4000 per sq ft touched R7000 per sq ft to­wards the end of the year. The area also saw launches by well-known brands. Res­i­den­tial de­mand on Golf Course Road was driven by heavy de­mand from cor­po­rates. Golf Course Ex­ten­sion wit­nessed a high level of ac­tiv­ity from in­vestors look­ing for lu­cra­tive re­turns.

The Noida Ex­ten­sion mar­ket was driven by end-user de­mand due to the af­ford­abil­ity of avail­able op­tions. Some of the projects in the area ap­pre­ci­ated by 25%. Noida’s res­i­den­tial realty mar­ket achieved an ap­pre­ci­a­tion of around 20% in 2012, ac­cord­ing to data by Jones Lang LaSalle.

The Delhi res­i­den­tial prop­erty mar­ket did not see very im­pres­sive ac­tion, largely due to ex­or­bi­tantly high rates and very lim­ited sup­ply. The ac­tion has now shifted to L zone un­der Master Plan 2021, es­pe­cially af­ter the farm­house pol­icy of Delhi was passed by DDA (not no­ti­fied). The pol­icy sought to bring down the cost of own­er­ship of farm­houses and al­lowed for a min­i­mum size of 1 acre against 2.5 acres ear­lier.

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