RERA implementation takes a step ahead
The implementation of RERA inched ahead as Haryana launched separate portals for the Panchkula and Gurgaon benches, and the latter issued delay notices to over 50 builders in the city. Further, Delhi appointed its full-time chairman to expedite the functioning of the Authority. Uttar Pradesh RERA, too, reportedly resolved over 500 complaints, reinstating homebuyers' faith in the realty sector.
Affordable housing takes to the forefront
The development of affordable homes received a shot in its arm with thousands of homes planned for the EWS and LIG segments. While the Delhi government approved 5,600 homes under PMAY, the UP Housing Board announced its plan to construct over 5,000 homes by 2021. Ghaziabad Development Authority (GDA), too, revealed its plan to construct 13,500 homes under PMAY by the end of 2019.
Infrastructure upgrade at its peak
The city witnessed some large-scale projects taking shape this quarter. The metro extension of the Violet Line from Mujesar to Ballabhgarh and the opening of the 9.7 km-long Lajpat Nagar-Mayur Vihar Pocket 1 of the Pink Line cheered homebuyers. The launch of the Rani Jhansi Flyover and the Kundli-Manesar-Palwal (KMP) Expressway, too, infused positivity amongst realty enthusiasts.
Haryana revises circle rates
The Haryana government hiked the circle rates by 10-25 percent, negatively impacting real estate transactions in the short-term. However, the decision to contrariwise the hike in a few locations lent some hope to the homebuyers.
New infra projects on the cards
Several new infrastructure projects, including the proposal of a 14 km-long elevated road between Mahipalpur Bypass and Barapullah, the Delhi Metro Phase IV and the Delhi-Mumbai expressway project in Haryana instilled hopes of a realty revival in the future.
Delhi NCR displayed positive home buying sentiment in the festive quarter of Oct-Dec 2018. Buyer preference remained inclined towards ready units. Sales in the under-construction and new launch segments remained muted despite lucrative offers floating in the market. Several projects at advanced stages of completion in Gurgaon, Noida and Greater Noida garnered healthy buyer traction. As supply of housing units rose by two percent, property prices in the city remained stagnant, QoQ. The rental market witnessed a marginal uptick of a percent, YoY.
Price correction in micro-markets of Noida and Dwarka Expressway triggered a positive sentiment; however, buyers continued with a cautious stance, limiting the sale conversions. A dip in the residual inventory in Noida and Greater Noida spelt good news for the zone. Delhi continued displaying a sluggish market force with the slow-paced execution of RERA emerging as a deal-breaker.
New launches remained largely restricted to affordable housing projects priced within Rs 40 lakh. Delhi NCR saw a total of 3,700 units being added to the market, this quarter. With the Government deferring a decision on the GST rate cut on under-construction projects, transactions were put on hold for another quarter.
The completion of a plethora of infrastructure projects this quarter cast a silver lining around Delhi NCR’s realty landscape. The commencement of multiple metro lines and the launch of the long-awaited KMP Expressway opened avenues of realty growth in the city peripheries. The realty sector is expected to piggyback its way towards a revival on the likely completion of 51 km of metro network in the coming three months. An increment in property prices is, however, yet not on the cards.
NOIDA, GREATER NOIDA AND GHAZIABAD
Property sales in Noida, Greater Noida and Ghaziabad, remained subdued in Oct-Dec 2018 as the price-sensitive homebuyers refused to indulge in festive deals. Cautioned by the number of projects stuck and delayed, buyers completely deserted the under-construction market. Poor sales and piling inventory led the average weighted capital prices across the three regions to maintain status quo. The rental market, too, narrated a sullen tale, across zones.
The history of delayed projects and insolvency cases led homebuyers to snub the under-construction segment in Noida and Greater Noida completely. Enquiries for ready homes recorded an uptick in the quarter; however, only the deals which were attractive in terms of pricing, payment plan and offerings managed to convert into sales.
Demand for premium properties priced within Rs 5,000-6,000 per sq ft resurged in Noida; however, sales remained tepid. Price points in posh areas such as Sector 28, 29 and 34 dwindled by 2-3 percent, QoQ. The comparatively affordable stock in Noida Extension, priced within Rs 2,500-4,000 per sq ft, witnessed a 10-15 percent price correction, pushing end-users to close deals. Sectors 70, 118 and 121 emerged as the top performers with a three percent hike in average capital values, each, QoQ.
The reduction in residual inventory owing to a restraint on new launches spelt good news for the region. However, the zone still holds over 65 percent of the total unsold inventory across Delhi NCR, amounting to almost 1.3 lakh units. Over supply continued to put downward pressure on price points, even as Noida-Greater Noida inched closer to the launch of its much-awaited Aqua Metro line.
The in-principal nod to the conversion of leasehold rights to freehold, and the decision to allow the sale of independent floors cheered homebuyers. On the RERA front, the efficiency of the Greater Noida bench towards tackling Noida-based cases strengthened buyer sentiment.
In Ghaziabad, micro-markets of Indirapuram such as Abhay Khand and Shakti Khand 3 posted a 2-3 percent upsurge in prices as property owners inflated the ‘ask’ rates to settle negotiations. The operation of the elevated road connecting Delhi and Raj Nagar Extension led the latter to report increased conversions. Oversupply of housing units, however, restricted price growth to an insignificant one percent, QoQ.
With a nominal one percent rise, the rental market in Noida and Greater Noida displayed rigidity despite looming supply. Ghaziabad, on the other hand, succumbed to oversupply and lack of economic activities and recorded a one percent dip in rental values, YoY.
GURGAON AND FARIDABAD
Residential real estate sales in Oct-Dec 2018 held the momentum of the preceding quarters in Gurgaon. The restricted number of launches helped the city absorb the legacy built-up of inventory. While sale trends displayed improvement, QoQ, prices remained unchanged, paving the way for a revival in the upcoming quarters. The expansion of the metro line to Ballabhgarh added a dash of hope to Faridabad’s real estate landscape.
An improvement in property enquires and sales during the festive season failed to trigger an upward movement in property rates in Gurgaon. The average weighted capital prices maintained status quo in Oct-Dec 2018 versus the previous quarter. The rental market, on the contrary, saw robust demand and transactions. Pile-up of residential inventory in popular housing hubs, however, limited the growth of rental values to two percent between Oct-Dec 2018 and the same quarter last year.
Affordable housing ruled the roost with majority developers tapping the peripheral locations of New Gurgaon, Sohna and the recently-opened KMP Expressway. With a price tag of up to Rs 40 lakh, the projects hold the potential to meet the prevailing demand in the market. However, the buyer focus is currently tilted towards ready or near-ready homes in Gurgaon.
The launch of multiple projects under Haryana’s affordable housing scheme led the city inch towards a demand-supply equilibrium. With a four percent spike in supply of homes priced within Rs 40 lakh in Gurgaon this quarter, the city stands with a mismatch of seven percent in demand and supply, as against 11 percent reported in the previous quarter.
Several developers bet on Dwarka Expressway and launched a few new projects along the stretch this quarter. Additionally, with the Gurgaon Authority doubling the circle rates in some old localities along the expressway, the average weighted prices displayed quarterly variations. While the circle rates of privately developed localities were left unchanged, areas such as Sector 102, 104 and 109 reported a surge in capital rates by 3-4 percent, QoQ.
The commencement of the metro line till Ballabhgarh fueled homebuyer interest in the otherwise grim market of Faridabad. The newfound metro connectivity pushed enquiries, albeit sales remained subdued. Locations such as Ashoka Enclave, and Sector 89 in Neharpar reported a noticeable upward price movement to the tune of five percent, each, QoQ. The rental market in Faridabad, too, received a push from the launch of the metro route. Locations such as Sector 86 and 87 in Neharpar, and Sector 37 saw average rental values surging by five to six percent, YoY.
In continuation with the trends noted in the previous quarters, property enquiries, sales and new launches remained grim in the capital city of India in Oct-Dec 2018. Infrastructure projects, both recently completed and ongoing, held the baton to the city’s realty growth. Majority real estate activities concentrated in areas connected to the recently commenced routes of the Delhi metro. The city displayed a one percent upward movement in average weighted prices this quarter over the previous one.
Home buying sentiment in the capital city of Delhi was largely influenced by the multiple infrastructure projects which took shape in the current quarter. The opening of the metro routes – Mujesar to Ballabhgarh (Faridabad) and Lajpat Nagar to Mayur Vihar Pocket I – instilled hopes of a price appreciation amongst property owners. However, the advancements failed to drive fence sitters to finalise purchase decisions. Sales remained muted, across zones. Locales such as Mayur Vihar Phase I and III benefitted from the commencement of the metro route and reported a price hike of three percent, each, QoQ.
Several South Delhi locales saw incremental prices as the sealing drive freed the areas of unregulated commercial developments and the completion of a phase of the metro eased traffic congestion. South Delhi topped the charts of capital growth with areas such as Green Park and Green Park Extension, Shivalik, Jor Bagh, Jasola, Lajpat Nagar II and Hauz Khas taking the top spots with 4-5 percent price appreciation, each, QoQ.
Kundli, the first leg of the KMP Expressway, registered renewed interest of homebuyers post the completion of the much-awaited corridor. Transactions, however, remained meek. Property prices registered a hike, albeit a minimal one percent, QoQ.
Dwarka remained the epicenter of real estate activities in Delhi due to its proximity to Gurgaon and the airport. The area reported an increased number of property enquiries. Although sales volume remained low, Sectors 10, 17 and 19 saw average weighted capital ‘asks’ surging by 2-3 percent, each, QoQ. The rental market, too, remained upbeat in Dwarka owing to the availability of price competitive inventory and seamless connectivity via metro. Eight out of the top 10 rental performers in Delhi were areas from Dwarka including Sectors 5, 6, 7, 9, 11, 13, and 23. Rental values in these sectors spiked by 6-7 percent, each, YoY. Dwarka Mor, offering builder floors predominantly, too, featured amongst the frontrunners on Delhi’s rental graph.
Multiple government initiatives to meet the demand for affordable housing in the city were reflected in the total housing supply in Delhi, which spiked from 19 percent in Jul-Sep 2018 to 25 percent in Oct-Dec 2018. Maximum supply of these homes was noted in peripheral areas of Kundli and Narela, where connectivity continues to be a sore point.
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