Ris­ing From the Fall -Delhi-ncr

Be­yond the dark clouds, Delhi NCR is now look­ing at the sil­ver lin­ing. As the un­ex­pected fluc­tu­a­tions, pol­icy changes and new reg­u­la­tions set­tle down, the be­lea­guered re­alty of North In­dian state of Delhi is poised to see slow but steady growth, re­ports R

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For a home buyer, this is the best time to buy in Del­hiNCR but for in­vestors, the real-es­tate here is giv­ing neg­a­tive re­turns as NCR prices are see­ing lower growth rates than re­tail in­fla­tion. Over the past cou­ple of years, the real-es­tate mar­ket in Delhi NCR has been pas­sive given the‘triple tsunami’ of de­mon­e­ti­za­tion, RERA and GST. As per Knight Frank In­dia re­port, “The NCR res­i­den­tial mar­ket has been in a down­ward slide, since 2010, with ev­ery pass­ing year hit­ting a new low. In H2 2016, the mar­ket wit­nessed de-growth in de­mand and sup­ply by 29% and 73%, re­spec­tively, com­pared to the same pe­riod in 2015.” The fac­tors that can be at­trib­uted to the de-ac­cel­er­a­tion of growth in this mar­ket in­clude the lack of cus­tomer’s con­fi­dence due to lit­i­ga­tions and project de­lays, pil­ing up in­ven­tory, un­re­al­is­tic pric­ing and wrong kind of prod­uct. The com­mer­cial real-es­tate in this re­gion con­tin­ues to see strong de­mand from BFSI and con­sult­ing sec­tor, but IT de­mand for of­fice spa­ces has been sub­dued and there is a deficit of Grade-a of­fice space sup­ply. While the slow­down in real-es­tate is a na­tion­wide phe­nom­e­non, Del­hincr seems to be worst hit as the in­ci­dences of project de­lays have been the high­est here and the trust deficit in the prop­erty buyer is at an all-time low.

Pradeep Jain chair­man, Parsav­nath stated, “Delhi NCR mar­ket is spread across the states of Delhi, Haryana and Ut­tar Pradesh. Af­ford­able res­i­den­tial mar­ket is do­ing fairly good in the price range of 25-30 lakhs. To­day, de­vel­op­ers are launch­ing only those projects which com­ply with the RERA reg­u­la­tions and are likely to be com­pleted within the promised time­frame.”

mi­cro-mar­kets Be­hav­ior

Na­tional cap­i­tal Re­gion (NCR) that in­cludes Noida, Greater Noida, Ghazi­abad, Farid­abad and Gu­ru­gram ac­counts to one of the big­gest re­alty mar­kets in the coun­try, There is a flurry of in­fra­struc­ture projects com­ing up around Delhi and within these mi­cro mar­kets giv­ing them a dis­tinct mar­ket iden­tity. The in­dus­try has been on a back foot since the last quar­ter of 2016 given the ef­fect from de­mon­e­ti­za­tion. The in­dus­try wit­nessed a dull de­mand re­sult­ing in a lim­ited num­ber of new project launches in H1 2017. As per in­dus­try ex­perts, the de­mand is ma­jorly for ready-to-move-in prop­er­ties and only 10% buy­ers are in­ter­ested in un­der con­struc­tion projects. Res­i­den­tial mi­cro-mar­kets are fol­low­ing a de­vel­op­ment pat­tern in align­ment with tran­sit ori­ented de­vel­op­ment as it suf­fices the need for the ma­jor­ity of prospec­tive home­buy­ers. Delhi is mostly sat­u­rated in terms of new hous­ing con­struc­tion. Due to lim­ited va­cancy, the prop­erty prices are high but have re­mained sta­ble. The new Land Pool­ing Pol­icy and plans for re­de­vel­op­ment of old DDA colonies are ex­pected to open up land for new hous­ing projects.

With the fo­cus on com­plet­ing ex­ist­ing projects, the dip in new projects sup­ply may in­crease the prices by 15-20 %. Hope­fully, res­i­den­tial mar­ket will im­prove quar­ter-on-quar­ter and will fully sta­bi­lize within a year. Pradeep Jain chair­man, Parsav­nath

Noida is a home buy­ing des­ti­na­tion for mid-in­come group and the ex­ten­sion of metro till Greater Noida and Noida ex­ten­sion has made this area a fa­vor­able op­tion. Af­ford­able hous­ing op­tions are avail­able in Noida Ex­ten­sion. Ac­cord­ing to manoj gaur, man­ag­ing Di­rec­tor, gaurs group, “Noida, Greater Noida and Raj Na­gar ex­ten­sion in Ghazi­abad are the bud­get hous­ing des­ti­na­tion. Noida and Greater Noida re­gion has a bet­ter catch­ment area with bet­ter com­mer­cial setup be­cause of the ex­ist­ing pop­u­la­tion.” The prices have largely re­mained sta­ble with a no­tice­able cor­rec­tion of 5-7% across Dwarka Ex­press­way and Golf Course Ex­ten­sion Road on the back of high avail­abil­ity of in­ven­tory in the sec­ondary mar­ket.

Gu­ru­gram is the em­ploy­ment hub and high-in­come res­i­den­tial area, but with in­fe­rior in­fra­struc­ture. Given the­qual­ity of of­fice space avail­able, most of the MNCS are set­ting shop here lead­ing to high de­mand for rental homes. Gu­ru­gram Ex­ten­sion, Sohna Road, Golf Course Ex­ten­sion have been ear­marked for in­fra­struc­ture de­vel­op­ment in the Gu­ru­gram De­vel­op­ment Plan 2021.Last year, about 40% of the new launches were in Sohna and Golf Course Ex­ten­sion Road. Though the base sell­ing price has not come down, de­vel­op­ers have re­duced the size of the units to bring af­ford­abil­ity. Amar­jit Bak­shi, man­ag­ing Di­rec­tor, cen­tral Park elab­o­rated, “Sohna Gu­ru­gram or ‘South of Gu­ru­gram’ (SOGO) is one of the hottest real-es­tate in­vest­ment des­ti­na­tion among as­pir­ing class buy­ers owing to fac­tors such as prime lo­ca­tion, easy ac­ces­si­bil­ity, af­ford­abil­ity and de­vel­op­ing in­fra­struc­ture and con­nec­tiv­ity. While Cy­ber City and Golf Course Road are most favoured for com­mer­cial projects due to their pre­ferred sta­tus and ac­ces­si­bil­ity, ab­sorp­tion on Sohna Road, Na­tional High­way 8, Udyo­gvi­har has been mainly due to their high af­ford­abil­ity. Large IT com­pa­nies have shown in­ter­est in Spe­cial Eco­nomic Zone (SEZ) projects and up­com­ing cor­ri­dors in Golf Course Ex­ten­sion.”

Farid­abad and Ghazi­abad host many in­dus­tries and fac­to­ries and have metro con­nec­tiv­ity from Delhi. Though the res­i­den­tial projects avail­able here cater to all seg­ments of home buy­ers, the lack of life­style ameni­ties is a con­straint. Raj Na­gar Ex­ten­sion, Indi­ra­pu­ram and Va­sund­hara in Ghazi­abad and NIT 3, Pali Vil­lage, Sec­tor 17, Sec­tor 19 and Sec­tor 25 in Farid­abad are some of the pop­u­lar lo­ca­tions.

com­mer­cial Re­alty go­ing strong

Dur­ing the April-to-june 2017, Delhi NCR wit­nessed close to two mil­lion square feet of of­fice space ab­sorp­tion. A ma­jor­ity of this takeup was recorded in the Gu­ru­gram mi­cro-mar­ket. While Gu­ru­gram dom­i­nated leas­ing ac­tiv­ity dur­ing the re­view pe­riod, Noida recorded a quar­terly in­crease in ab­sorp­tion. Sus­tained oc­cu­pier in­ter­est re­sulted in the mi­cro-mar­kets of NH8, Main Noida and DLF Cy­bercity driv­ing more than half of the re­gions leas­ing ac­tiv­ity. Most of the ab­sorp­tion was in non-it spa­ces in de­vel­op­ments on NH-8 in Gu­ru­gram, Ae­roc­ity in Sec­ondary Busi­ness District and Main Noida.

De­vel­op­ers have been con­strained with cash flow prob­lems over the past few years due to sig­nif­i­cant un­sold stock. the de­vel­op­ment of af­ford­able hous­ing sec­tor is ex­pected to pro­vide some relief and op­por­tu­nity to fo­cus on sales of pend­ing stock. Amar­jit Bak­shi, man­ag­ing Di­rec­tor, cen­tral Park

Ac­cord­ing to the re­cent re­port by CBRE South Asia Pvt. Ltd, on the sup­ply side, quar­terly sup­ply ad­di­tion in­creased but was lim­ited to Gu­ru­gram. Most of the new sup­ply en­ter­ing the mar­ket was due to the re­ceipt of long pend­ing com­ple­tion cer­tifi­cates. Leas­ing ac­tiv­ity con­tin­ued to be driven by small to medium-sized trans­ac­tions, DLF Cy­bercity (SEZ) wit­nessed a rental growth of about 3 – 4% q-o-q. Ris­ing va­cancy lev­els in se­lect de­vel­op­ments re­sulted in a mar­ginal rental dip of about 2-4 % q-o-q in the Sec­ondary Busi­ness District of Nehru Place and Ja­sola in Delhi.

Talk­ing about the grow­ing com­mer­cial mar­ket of Delhi NCR, Jain, “Sup­ply of the com­mer­cial prop­er­ties is lim­ited but there is a strong pur­chase and rental de­mand for the com­mer­cial prop­er­ties. The fu­ture growth is likely to hap­pen along the GT road belt of Kun­dal­isoni­pat and Greater Noida belt.”

role of govern­ment

The real-es­tate sec­tor in In­dia has tra­di­tion­ally not en­joyed a fa­vor­able im­age in the eyes of con­sumers for var­i­ous rea­sons - con­struc­tion de­lays, sub-stan­dard qual­ity of con­struc­tion and poor cus­tomer ser­vice. Even though real es­tate is the sec­ond largest em­ployer in the coun­try, it still lags be­hind in com­par­i­son to other sec­tors owing to old re­forms, com­plex prac­tices and un­reg­u­lated pol­icy frame­work. Jain con­curred to the fact and said, “In­tro­duc­tion of RERA had a pos­i­tive im­pact on the de­mand and sup­ply sce­nario. It is en­cour­ag­ing se­ri­ous in­vestors into the mar­ket and prospec­tive end-users have slowly started gain­ing trust. There used to be lack of clar­ity for the home buy­ers on how much us­able area they were get­ting for what they were pay­ing. Now, the as­sured trans­parency for the in­vestors and buy­ers is sprout­ing hopes for the con­cerned share­hold­ers.”

One of the key pro­vi­sions of the RERA act is that de­vel­op­ers need to main­tain a min­i­mum of 70% funds col­lected from cus­tomers in an es­crow ac­count that would be uti­lized ex­clu­sively to meet the con­struc­tion cost of the project. Also, if the de­vel­op­ers fail to de­liver on the project in the promised time­frame, they would need to pay back same in­ter­est as the EMI be­ing paid by con­sumer.how­ever, the re­alty sec­tor is still a long way from achiev­ing a sin­gle win­dow clear­ance regime. gaur com­mented, “The govern­ment should try and make the land bill uni­form in or­der to as­sure bet­ter land pro­cure­ment. Also, the sin­gle win­dow clear­ance would bring in ap­provals on time and fas­ten project con­struc­tion life­cy­cle.”

“Al­though the govern­ment has laid the foun­da­tion for stream­lin­ing a lot of hur­dles with RERA, the onus lies equally on the de­vel­op­ers to change the im­age of the sec­tor. The de­vel­op­ers need to ad­dress this on pri­or­ity and find ways to en­sure speedy com­ple­tion of pend­ing projects,” added bak­shi

It can be rightly said, that the pas­sage of land pool­ing pol­icy in Delhi is a wel­come step to­wards stream­lin­ing the process of ac­quir­ing land for ur­ban de­vel­op­ment.once the mech­a­nism of ad­dress­ing project ap­proval de­lays, land price, qual­ity of con­struc­tion, ti­tle and other changes are put into prac­tice, the Delhi-ncr real-es­tate will slowly and grad­u­ally turn pos­i­tive even show­ing great re­sults.


Delhi-ncr lux­ury and com­mer­cial seg­ment slumped due to the down­turn in the over­all na­tional eco­nomic growth. But, there has been a mi­nor drop in prices for low- to medium-cost hous­ing. This shows, in which seg­ment the fu­ture growth lies for the sec­tor in this re­gion. In ad­di­tion, the govern­ment’s push for af­ford­able hous­ing seg­ment is cre­at­ing fa­vor­able con­di­tions for the real-es­tate sec­tor of the mi­cro mar­kets of NCR.

More­over, the de­vel­op­ers of the re­gion are grad­u­ally com­ing up with RERA cer­ti­fied projects. They are also main­tain­ing proper es­crow ac­counts and as­sur­ing trans­parency from their end. De­vel­op­ers know that main­tain­ing trans­parency is the only way out to deal with the trust is­sues of in­vestors and home buy­ers.the ad­vent of reg­u­lat­ing acts will give a pos­i­tive ap­proach to the home­buy­ers and de­vel­op­ers, cre­at­ing a cli­mate of ac­count­able deals. Given the cur­rent sce­nario in Del­hiNCR, res­i­den­tial real-es­tate prices seem to re­main sub­dued for at least next two years es­pe­cially among mid­dle-in­come buy­ers. RERA will cor­rect many of the anom­alies and ward off spec­u­la­tive in­vestors yet more re­forms are re­quired in state’s project sanc­tion­ing au­thor­i­ties. The pe­riod of tran­si­tion is painful but post tran­si­tion, the Delhi-ncr and the en­tire coun­try’s real-es­tate is set to be­come a buy­ers’ mar­ket.



gaur CITY, noida

Manoj gaur

Project By CEN­TRAL Park, gu­ru­gram

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