RERA compliance kept Delhi NCR market on tenterhooks
Several delays and dilutions in the announcement of UP, Delhi and Haryana RERA rules kept realty sentiment subdued. While National Capital Territory (NCT) of Delhi and Haryana are yet to launch their websites, UP made its RERA website live in July.
Haryana’s new land pooling policy to propel infrastructure development
Aiming to motivate owners to willingly contribute their plots for development, the proposed policy will offer to return a part of the developed land parcel to landlords who volunteer for the pooling scheme.
DDA’s new housing scheme focuses on LIG
Of the 12,072 flats in Delhi’s housing scheme launched recently, almost 11,200 are under the LIG blanket. Only 404 are MIG flats and 87 HIG units. The scheme is aimed at broadening housing appetite of the EWS category of the city.
Delhi gets a 30-day building plan approval system
Simplifying the building plan sanction process for developers, municipal corporations in Delhi introduced the much-awaited single window clearance system. Buyers rejoiced the move, expecting lesser wait time for project completion.
First-time homebuyers in Noida to enjoy subsidy under PMAY
Those purchasing a home in Noida, Greater Noida and Yamuna Expressway can now avail an interest subsidy of Rs 2.5 lakh. This policy will encourage potential buyers to take the plunge.
Delhi NCR at a Glance
Reduced inventory overhang, albeit by an insignificant margin, proffered a ray of hope to Delhi NCR’s realty landscape in the quarter ending September 2017. The dullness was also dissipated slightly by growth in supply of affordable housing projects. Nearly 90 percent of the new launches in Gurgaon belonged to the price bracket of Rs 20-25 lakh. Certain pockets of Gurgaon and Noida were able to beat the market blues with new infrastructural developments and ongoing road overhauls.
With modest sales velocity and RERA ensuring more accountable developers, chances of price hike are likely to be remote in the forthcoming quarters. Developers are expected to continue focussing on offloading existing inventory, at the same time, re-planning configurations to suit the budget requisites of the buyer community. Such measures are anticipated to tweak excess housing stock slightly and bridge the demand-supply gap.
Further, there is probability of investor traction in the micro-markets of Greater Noida and Gurgaon, and certain pockets of Ghaziabad due to enhancement in road and metro connectivity. The sanctioning of 12,000 DDA homes and Jewar International Airport, revision of land allotment policy in Noida-Greater Noida and expansion of NH-24 will have a positive impact on NCR’s realty in the long term. Meanwhile, an improvement in the law and order situation and increased clarity on the new policy changes can go a long way in bolstering real estate sentiment.
NOIDA AND GREATER NOIDA
The real estate market of the twin cities continued to trudge in the wake of reputed industry stalwarts declaring insolvency and new transaction policies by Noida and Greater Noida Authorities. The mandate to seek Transfer Memorandum from the respective authorities, in projects with Occupancy Certificates (OC), pushed resale price tags higher, marring buyer sentiment. The quarter Jul-Sep 2017 also witnessed the developer fraternity taking a defensive stance awaiting the full impact of RERA. The radical reform with its far-reaching consequences restricted transactions and put the market in a pensive mode.
- While the capital graph of Noida and Greater Noida reported a quarterly marginal dip, the rental landscape posted a three percent cumulative downturn, YoY.
- The well-established Sectors of 37 and 93A, Noida, emerged as the frontrunners in the capital market with four percent improvement in ‘ask’ prices in Jul- Sep 2017, as compared to the preceding quarter.
- Central location, spurts of redevelopment activity and sturdy physical and civic infrastructure accounted for the positive price movement in Sector 37. Meanwhile, Sector 93A formed an oasis for buyers, flanked by conflict-ridden Sectors of 100, 107 and 110, and Jaypee Wish Town where project construction has been in a state of limbo since several quarters.
- Property prices in Sectors 51 and 52 improved by three percent, QoQ, on account of being well developed with all the essential civic amenities, offering a leverage over the neighbouring Sectors of 74-79. Quick connectivity to the commercial belt of Sectors 58, 62 and 63 also lent an edge to these residential pockets.
- Less than 20 percent of the tracked localities in Noida and Greater Noida reported an upswing in rental values in Jul-Sep 2017, vis-à-vis 2016, with Sector 20, Noida, holding the baton of progressive charts with a seven percent annual rise. Comparative affordability and strategic location worked in favour of the region.
- Traction from workforce in the twin cities propelled rental values of builder floor units in Sectors 45 and 49, Noida. Both the localities witnessed a growth of four percent, YoY.
- Sectors 77 and 78, too, recorded a four percent yearly rise in rental ‘asks’, owing to fresh development by popular builders and proximity to offices along the Noida-Greater Noida Expressway. The area surrounding Sectors 74-79 houses several kilometres of farmland and has the potential to develop into an Indirapuram-like locale, believe industry stalwarts.
GURGAON, FARIDABAD, BHIWADI & DHARUHERA
The capital and rental markets of Gurgaon and Faridabad delineated a contrasting tale in Jul-Sep 2017. While average weighted property values in both the cities declined slightly, QoQ, the rental graphs displayed an uptrend of two percent, YoY. Restricted new launches pruned inventory levels in the Millennium City, thereby, reducing the demand-supply gap by a small margin. Faridabad, on the other hand, maintained status-quo in terms of new projects, save a couple of launches in the affordable segment in the quarter. The micro-markets of Bhiwadi and Dharuhera, which are typically looked upon as investment zones, awaited urbanisation and superior infrastructure.
- Subdued transactions and limited fresh supply marked the realty landscape of Gurgaon and Faridabad. Anxious developers focussing on completing projects and cautious homebuyers anticipating the full impact of policy changes did little to improve sales volume.
- Beating the market blues, Sectors 24, 65 and 109 in Gurgaon topped the capital charts with four percent rise in ‘ask’ rates, QoQ. New project launches and availability of possession-ready homes by reputed developers worked in favour of these areas.
- Property prices in Sector 54 bolstered on the back of reduced traffic gluts and improved connectivity to Cyber Hub via the Golf Course underpass.
- Faridabad’s realty market remained lustreless in the face of weak home buying sentiment. Only 19 percent of the tracked localities posted a surge in home values in July-Sep 2017, against the preceding quarter.
- Sector 89 in Faridabad recorded an uptrend in the capital graph, albeit insignificant, on account of being one of the eminent residential localities, situated at an easy distance of 7km from Nehar Par.
- Proximity to South Delhi and comparative affordability propelled home prices in the upmarket locality of Charmwood Village in Faridabad, translating into stable market sentiment.
- A consistent increase in office space absorption and sustained occupier interest, particularly in Cyber City, Golf Course Road and NH-8, pushed the residential rental segment in Gurgaon to witness an uptick in Jul-Sep 2017, as compared to Jul-Sep 2016.
- Construction of a flyover at Hero Honda Chowk reduced traffic bottleneck and propelled rents in Sector 34, Gurgaon. The locality emerged as a frontrunner with a 12 percent increase in rental values, YoY.
- Buttressing of the Southern Peripheral Road (SPR) drove rental sentiment in Sectors 70 and 71, each of which witnessed an annual surge of eight percent in Jul-Sep 2017.
Real estate sentiment in Ghaziabad remained meek with both the capital and rental markets reporting a slump in Jul-Sep 2017, albeit marginal, over the preceding quarter. While the city continued attracting enquiries from budget-conscious buyers, the conversion rate remained limited to residential belts close to commercial areas. The quasi-industrial city has pinned all hopes of realty revival on the completion of the Delhi-Meerut Expressway and broadening of NH-24. Improved connectivity holds the promise of revitalising the pockets along the ambitious infrastructure projects.
- Nestled in Indirapuram, Gyan Khand I, Ahinsa Khand I, Niti Khand I and II reported an increase of one to two percent in average weighted capital ‘asks’, QoQ. Advent of builder floor projects featuring 6-7 units, thereby evading RERA compliance norms have been credited for the price rise. This trend is specifically apparent in Gyan Khand I, which emerged as the frontrunner in Jul-Sep 2017, vis-à-vis Apr-Jun 2017.
- Anticipation of enhanced connectivity via the expanding metro network buoyed realty sentiment in Mohan Nagar. The locality boasted of a quarterly growth of two percent.
- Rajendar Nagar and Bhopura, too, recorded an upswing of two percent in Jul-Sep 2017. This was attributed to presence of comparatively low-priced properties in Bhopura and ambitious ‘asks’ in Rajendra Nagar.
- The popular pockets of Kaushambi and Ramprastha were also among the 30 percent tracked localities that witnessed a positive price movement in Jul-Sep 2017.
- The residential belts of Pratap Vihar, Dasna, Greater Noida West, Khora and Vijay Nagar are anticipated to witness growth in successive quarters on the back of the NH-24 buttressing project.
- The rental market mirrored the downcast realty ambience of the city with only 33 percent of the tracked localities posting annual growth.
- Abhay Khand in Indirapuram led the race with a massive 12 percent surge in rental values, YoY. Ahinsa Khand I, Nyay Khand I and Vasundhara, too, reported a buoyant market with 4-8 percent spike in rents in Jul-Sep 2017. Proposed infrastructure plans, promising an improvement in the connectivity quotient and reduction in traffic gluts, have bolstered rents.
- Shalimar Garden followed Abhay Khand, exhibiting a progression of 10 percent on the rental charts in Jul-Sep 2017, vis-à-vis 2016. Redevelopment of the Grand Trunk (GT) Road gave the owner community an opportunity to spike rental ‘asks’.
New reforms, infrastructure deficit and land acquisition hurdles continue weighing down on Delhi’s real estate sentiment. The Jul-Sep 2017 quarter witnessed property prices in the capital city maintaining status quo with the previous quarter. The launch of Delhi Development Authority’s (DDA) housing scheme and proposal for new infrastructure development on the Dwarka Expressway offered a silver lining. In contrast to the capital segment, the rental market narrated a positive story, with average ‘asks’ climbing by two percent, YoY.
- Capital prices remained stable in East Delhi and Dwarka, while the North, South and West zones displayed a downtrend in Jul-Sep 2017.
- Close to 40 percent of the tracked localities in Delhi boasted of quarterly capital growth, primarily due to artificial price hike, infrastructural enhancements and improved connectivity.
- The otherwise lacklustre belt of Narela in the fringes of Northwest Delhi outpaced other residential locales, recording a surge of five percent, QoQ, in capital rates. Proposed Urban Extension Road (UER) I and II offered hopes of improved road network between the sub-city and Manesar via Dwarka, thus providing the broker community an opportunity to hike rates.
- Despite delays, hopes of better connectivity to Sarai Kale Khan via the Barapullah Road have strengthened realty sentiment in Mayur Vihar III, leading to a rise in capital values by three percent, QoQ.
- Pitampura in North Delhi gained robust traction from budget homebuyers as DDAs’ Housing Scheme neared application deadline in September 2017. The scheme offers 12,000 flats under four income segments, ranging from close to Rs 7 lakh to over Rs 1.26 crore.
- In tandem with the last few quarters, the rental segment of Delhi took precedence over its capital market, with every zone reporting a positive movement, YoY, on the residential leasing charts. Over 60 percent of the tracked pockets boasted of ascending rental graphs.
- Dwarka positioned itself as the favourite rental destination, witnessing an average annual growth of six percent in Jul-Sep 2017 against the same quarter last year. Sectors 4, 18, 22 and Dwarka Mor held the baton of progress, recording a rise of seven to eight percent, YoY. These sectors received an impetus from CBI’s clearance of the societies, which were under the scanner since 2006-07.
- Average rents in Mahavir Enclave buoyed to the tune of eight percent in Jul-Sep 2017, vis-à-vis 2016, owing to its proximity to Dwarka and availability of cost-effective homes.
Buyer sentiment continued to remain meek in the face of confusions regarding RERA and GST norms. Meanwhile, the developer fraternity’s focus on project completion, coupled with the prerequisite to observe RERA proviso, trimmed inventory levels in the NCR by a small margin. As new launches declined in all the micro-markets, demand and supply of apartments also reported a semblance of equilibrium in Jul-Sep 2017 after several quarters of imbalance.
- Popularity of possession-ready homes scaled up slightly in the Noida-Greater Noida zone, while continuing with the same gusto in Delhi, Gurgaon, Ghaziabad and Faridabad in Jul-Sep 2017.
- Gurgaon and Faridabad exhibited a higher appetite for under-construction properties, capturing almost a quarter of the total market share of apartments.
- Demand-supply mismatch was evident in the affordable category of Rs 40 lakh and below. The popularity of budget homes surpassed availability by more than 10 percent, highlighting the need for additional government incentives to bridge the gap.
- The mid-income category, too, displayed growing lacunae in the demand-supply quadrants, with popularity of houses priced within Rs 40-60 lakh exceeding availability.
- An excess of supply was observed in the high-income, luxury and ultra-luxury brackets.
- While luxury houses recorded the least demand-supply mismatch, the high-income and affluent categories reported a disequilibrium of 7-9 percent.