Noida gets two functional metro lines
The two much-awaited metro routes in Noida – Aqua line linking Noida and Greater Noida, and the extension of the Blue Line to Electronic City – saw the light of the day. The developments are expected to strengthen housing demand in areas falling along the route.The metro authority also approved the 104 km-long Phase IV of Delhi metro, for which the Delhi Development Authority (DDA) has already allocated a sum of Rs 500 crore. Further, the Gurgaon authority progressed in its plan to connect Dwarka Expressway by metro.
UP RERA takes over stuck real estate projects
In a first-of-its-kind move, the Uttar Pradesh Real Estate Regulatory Authority (UPRERA)took up the construction of seven realty projects in Noida, Greater Noida region, which were to be delivered by 2013. The Authority has also resolved over 4,500 complaints, of the total 11,550 cases, till date.
Infrastructure upgrade takes to the forefront
Several infrastructure projects were seen taking shape in the quarter. While the government opened an elevated expressway to the Delhi airport, it also rolled out plans to connect Meerut and Faridabad via a high-speed corridor. Additionally, there are plans to extend the Ashram flyover up till DND Flyway to ease traffic congestion along the stretch.
New city under wraps in Faridabad
As a part of the Panchgram Plan envisioning five new cities along the Kundli-Manesar-Palwal (KMP) Expressway, the Haryana government approved the development of a new city in Faridabad. The work on the Master Plan is already underway. The city would be constructed over 56,000 hectares of land in Faridabad.
An uptick in the property sales momentum in the second half of 2018 continued in the Jan-Mar 2019 quarter in Delhi NCR. While the suburban markets of Gurgaon and Greater Noida spearheaded the sales charts, the capital city of Delhi displayed a rather dull buyer sentiment in the wake of limited new inventory across zones. Amidst improving sales, unsold inventory in Delhi NCR dipped to 1.42 lakh units in Q1 2019, 15 percent lower than the 2017-level of 1.66 lakh units. Now, the quarters to sell (QTS) the residential stock in the city stand at 15, unlike 17 a year ago.
Under-construction units by reputed builders garnered better response than the preceding months. The revision in the Goods and Services Tax (GST) regime, however, came as another short-term hurdle in the revival of the segment. In a bid to reap the benefits of reduced GST rates, homebuyers, once again, opted to wait until April 2019 to finalise property deals. Ghaziabad and Faridabad regions, which hold the maximum affordable housing inventory across Delhi NCR, bore the maximum brunt after the GST rate on the segment was slashed to one percent from eight percent.
The addition of over 6,000 new units in H2 2018 paved the way for a rigorous 2019. Gurgaon alone accounted for over 2,000 new unit launches in Jan-Mar 2019, especially in New Gurgaon and Dwarka Expressway. Gurgaon and Greater Noida together accounted for over 75 percent of the new supply added in Delhi NCR in Jan-Mar 2019 and its preceding quarters. With Land Pooling Policy, Transit Oriented Development (TOD) and expansion of Delhi metro on the cards, the city’s realty is on a road to recovery.
NOIDA, GREATER NOIDA AND GHAZIABAD
The impasse in the Noida and Greater Noida’s real estate sector, induced by the delayed completion of projects, continued this quarter, too. The newly launched metro lines, however, gave the much-needed fillip to buyer sentiment and led the average weighted prices to post a nominal one percent hike in Jan-Mar 2019 over Oct-Dec 2018. While all eyes are on the progress of Jewar International Airport, the baton to the revival of the market lies in the hands of the RERA authorities.
Property demand in Noida remained tepid as debt-laden developers struggled to complete pending projects. Greater Noida, however, reported the maximum sales in the affordable segment (under Rs 50 lakh), across Delhi NCR. In line with the previous quarters, housing demand inclined towards ready homes. Transactions, however, remained meek as nearly 25,000 ready units lacked completion certificates from the authorities, dampening buyer sentiment.
Under-construction units by renowned builders seemed to regain foot across the city, barring Noida and Greater Noida, which continued to reel under the air of inordinately delayed projects. Demand for under-construction homes dwindled further post the GST rate cut to five percent from 12 percent on the segment, which forms over 15 percent of the total residential stock in the zone.
With limited new launches and property sales, the inventory stock remained largely unchanged, QoQ. Sector 150 in Noida, and Sectors 1, 10, Zeta 1 and Pari Chowk in Greater Noida witnessed the maximum traction from both developers and buyers. The accumulated inventory, however, restricted price growth to 1-2 percent, QoQ.
The launch of the two metro lines – Aqua line till Greater Noida and the extension of the Blue line to Electronic City – was touted to be a game-changer for the city’s real estate landscape. The metro lines pushed ‘ask’ prices in Sectors 73, 77 and 120 in Noida, and Sector Pi, Chi 5 and Mu in Greater Noida by 2-5 percent, QoQ. The progress on the upcoming Jewar Airport, too, was closely watched as investor interest rose in areas along Yamuna Expressway.
Metro connectivity to the far-flung areas helped select micro-markets in Noida and Greater Noida break the two-year long impasse in the rental landscape. Sectors 76, 77, 137 in Noida, and Pi and Chi 5 in Greater Noida saw rental ‘asks’ going up by 4-8 percent, YoY.
Ghaziabad emerged as the only region posting negative price movement, albeit minimal. Raj Nagar Extension, which witnessed maximum buyer demand, saw prices slipping by a percent owing to surplus residential stock.
Despite lukewarm response from homebuyers, Greater Noida and Ghaziabad performed the best in Delhi NCR. Both the regions hold an inventory which requires 13 quarters to sell, unlike Noida which stands at 14 months and Gurgaon, which needs 18 months to exhaust its available residential stock.
GURGAON AND FARIDABAD
For the second quarter in a row, Gurgaon displayed a positive sales trend. Average weighted capital prices, nonetheless, maintained status quo. New Gurgaon and Dwarka Expressway remained at the cynosure of all real estate activity in the region. Towards Faridabad, Ballabhgarh metro corridor, which was launched in the previous quarter, propelled buyer sentiment, although property prices remained unimpacted.
Property sales reported an uptick in Gurgaon, especially in the newly launched projects by reputed builders in New Gurgaon and Dwarka Expressway. Close to 2,000 new units were added to the market in Jan-Mar 2019. The fast-paced absorption of these units was testimony to the regaining buyer confidence in the under-construction market. Sectors 102, 103 and 111 along the Dwarka Expressway emerged as the top performers with four to five percent rise in ‘ask’ rates, QoQ. The popularity of Dwarka Expressway resurged after the construction work on the highway resumed at eight stretches, instilling hopes of its completion in a few more months.
New Gurgaon magnetised homebuyers due to its comparative affordability to Gurgaon. Sectors 82A, 85, 86 and 90 witnessed healthy traction in terms of both new launches and deal conversions. The ‘ask’ rates in these areas surged by 4-5 percent, QoQ. The rental market, however, is yet to pick up in the area.
Majority new projects in Gurgaon offered homes priced under Rs 1.2 crore. The luxury segment remained distraught of any new launches due to poor uptake. The resale market, however, remained upbeat across budget segments owing to a price advantage of almost 5-10 percent over fresh booking.
With the government approving the registry of fourth floor of independent apartments in Gurgaon, demand for plotted developments surged, QoQ. New Gurgaon emerged as the most preferred choice of homebuyers due to the availability of competitively priced land parcels.
The capital market in Faridabad remained stagnant; however, select micro-markets witnessed marginal positive price movement. The far-flung areas of Sector 75, 76 and 77 saw prices appreciating by a nominal 1-2 percent in Jan-Mar 2019. The newfound metro connectivity till Ballabhgarh has been the prime catalyst driving residential demand in the areas. The metro has also played a vital role in boosting the rental landscape in Neharpar, where Sectors 85, 86 and 87 saw rental ‘asks’ going up by 7-8 percent, YoY.
The Real Estate (Regulation and Development) Act (RERA) remained an important factor behind improved consumer sentiment and enhanced residential sales across the Haryana towns – Gurgaon and Faridabad. However, the slow-paced redressal of complaints and no action on stuck projects delayed the revival in the markets.
The Jan-Mar 2019 quarter remained rather dismal for the real estate landscape of the capital city of Delhi. Property sales plateaued, prices became rigid and new supply was almost nil. Dwarka emerged as the only region with some real estate transactions. Infrastructure projects, primarily the metro expansion, remained the only sentiment propeller.
While the capital market in Delhi maintained status quo in Jan-Mar 2019, vis-à-vis Oct-Dec 2018, the rental landscape improved insignificantly by a percent between Jan-Mar 2019 and the same quarter last year.
With majority homebuyers eyeing the suburban towns of Gurgaon, Noida and Greater Noida for a potential investment in real estate, property sale trends remained sluggish in the capital city. The expanding metro network did little to boost sales, although enquiries reported an uptick in the connected locales such as Mayur Vihar I, II and III. Any noticeable price appreciation in these areas, i.e., 1-2 percent, was attributed to owners quoting higher ‘asks’ on account of improved metro connectivity. Deals, however, failed to close at an escalated price.
Inefficient implementation of the Real Estate (Regulation and Development) Act (RERA) has been one of the key factors for the sluggish real estate growth in Delhi. So far, the Authority has managed to register a measly 13 residential projects under Delhi RERA. The absence of an Appellate Tribunal to solve buyer complaints continued to be a dampening force for the market.
The development of affordable homes remained concentrated towards the fringes of the city, especially in Kundli, which garnered healthy buyer traction in the previous quarter post the completion of the Kundli-Manesar-Palwal (KMP) Expressway. Lack of transactions, however, resulted in a price correction of two percent in Jan-Mar 2019, post a one percent uptick in Oct-Dec 2018.
The capital market in Dwarka continued to tread a growth trajectory, albeit at a slower pace than the previous quarter. Sectors 3, 6, 9, 11, 14, and 18, saw the average weighted capital values going up by a nominal two percent, QoQ. The slowdown is primarily attributed to the general dip in property enquiries ahead of the General Elections in April 2019. The rental market, however, continued on the growth path unabatedly with Sectors such as 3, 5, 10, 11, 18 and 23 recording a spike in rental ‘asks’ by 6-7 percent, YoY. The surge of commercial office spaces, close to Dwarka, coupled with its proximity to Gurgaon has triggered the boom in the rental landscape of the area.
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