The real estate market in Delhi’s NCR (National Capital Region) is bustling with high property demand and price hike. The market boom comes against the backdrop of sluggish demand for properties owing to the Covid-hit economy. The real estate business in Gurugram and Noida has seen a momentous growth in the last one year in comparison with Hyderabad, Kolkata, Bengaluru, Chennai and Mumbai. The humongous infrastructural development in Delhi-NCR has played a key role in the bustling business of real estate. According to a report published by CREDAI, Colliers and Liases: Delhi-NCR has seen an exorbitant increase in residential prices at 16 percent year-on-year in the March ending quarter of 2023, followed by Kolkata and Bengaluru with 15 percent and 14 percent Y-o-Y up respectively.

Soaring sales

The present soaring in home sales has sent the prices of property northwards. The presence of reliable developers, quality projects and infrastructural boost have made a conducive landscape of the real estate market in Delhi-NCR areas. Property prices have shot up by around 59 percent, as per media report, near Dwarka Expressway after the opening of the loop connecting Dwarka Expressway with NH-8 and the central peripheral road. The housing properties along Golf Course Road in Gurugram have witnessed a jump of 42 percent price rise.

Rising rentals

The CREDAI report has also stated that rental prices of residential properties have skyrocketed in Delhi-NCR. Home rents have increased up to 40 percent over the past year. The rental values of properties in Noida and Gurugram are exponentially going high as demands triggered by returning of employees to office from the Work-From-Home orientation. During the Covid catastrophe, legions of people shifted to their native hometowns that pulled down rents in Delhi and its neighbouring areas. Now new hiring and resumption of full office hours have jacked up the demands of new housing and house rents.

Gurgling Gurugram

The significant influx of people, establishments of corporate sectors, surging IT growth, and infra development have made Gurugram the most preferred destinations for the real estate investment in the country. In recent years, the real estate business has gone through a remarkable growth with property prices witnessing double-digit appreciation. As several major projects are on the horizon, the uptick in housing demand is expected to keep continuing.

As per JLL India report, Gurugram has registered a 31 percent growth in housing sales in 2021 with 8,400 units sold. The residential properties price hiked by 9 percent. As developers are incorporating eco-friendly features–solar panels, energy-efficient appliances, and rainwater harvesting–the demand of green buildings may grow at a CAGR of 30-35 percent, as the report suggests. RERA has brought transparency and trust in the real estate business, leading to increased investments of NRIs in Gurugram areas.

Nicety of Noida

Noida (New Okhla Industrial Development Authority), a part of Delhi-NCR, has become the most sought-after property destination because of majesty of MNCs, major commercial complexes and top-notch residential apartments coupled with the easy access to the national capital. Numerous renowned educational institutions, world-class medical institutions, reputable financial institutions, upscale restaurants, premium brands and recreational parks among other amenities have caught attentions of people from every walk of life.

Noida’s potential for future growth and development is also a key factor in its popularity. The city is witnessing ongoing expansion and the launch of new infrastructure projects, including the Jewar International Airport, which will further boost connectivity and economic activities in the region. Such developments create a positive outlook for property investment and appreciation. Real estate experts are of the view that it is the ideal time of investment in Noida. The city offers a blend of urban conveniences, job opportunities, and a comfortable living environment, making it an attractive choice for both investors and residents.

Conclusion

The real estate boom in Delhi-NCR can be attributed to factors such as urbanization, infrastructural development, economic opportunities, affordable housing options, expanding retail sector, government initiatives, and future growth prospects. These factors combined have created a favorable environment for real estate investment and have contributed to the region’s overall growth and development.

Given the positive fundamentals of the Indian economy, realtors and buyers can find their sweet spot in the real estate market. Despite global headwinds, the real estate industry in India stands resilient and may continue its strong momentum with positive sentiment of homebuyers. The improved infrastructure in Gurugram and Noida has boosted the real estate market that creates millions of job opportunities and attracts investments as well.

-RAMAKANT CHAUDHARY

Ramakant Chaudhary works with PR Professionals as DGM-Content, and has worked in various editorial roles with Financial Express, Mint (Hindustan Times Group), The Times Of India, Jagran Post (Dainik Jagran Group), The Pioneer, and The Political and Business Daily. He writes on politics, government policy, economy, infrastructure, , social issues, lifestyle, and health

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Whether technological, financial, regulatory, or consumer-driven change, there have been many exciting developments in 2019 that promise a positive outlook for real estate. This article highlights 5 trends with the potential to drive disproportionate change in 2020 and beyond.

SEBI-regulated investments: Prior to RERA, pre-launch sales were an important source of early-stage capital for real estate developments. While convenient, these were unregulated opportunities with no standardization of structure or transparency. Today, there has been a marked shift toward regulated investments for the early, pre-approval phase of a project. These investments typically use an AIF structure and, in some cases, the PMS route. Exits, especially for rent-yielding properties, have started moving to the REIT structure.

Managed offices and homes: Worldwide, co-working and managed offices are the fastest growing parts of commercial real estate. These offices allow tenants to focus on their core business and leave facility management and services to a specialist operator. In India, the sector is set to achieve 10 million square feet in record time, with more than a 10% market share of total office leasing already. Similarly, the more nascent category of co-living, which provides managed homes, grew 100% in 2018 and has attracted a large number of players. We expect these sectors to continue to grow but weaker players will be winnowed in the Darwinian struggle for survival

Specialization: Every industry tends to reward either vertical integration or increased specialization when competition intensifies, and real estate is no different. Where once developers engaged in pretty much all types of real estate developments, higher specialization will be required in the future as competitive pressure makes it difficult to succeed as a jack of all trades. We can expect to see developers specializing in retail, logistics, senior-housing, student-housing, medical offices, and such other specialized sectors and these specialist players are likely to significantly grow their market share within these sectors at the expense of the generalist developers.

International scale projects: As capital-raising moves from informal HNI networks to institutional funding, the amount of capital that can be raised for a single project will continue to witness strong growth. This will allow deal sizes to increase, which means there are likely to be larger real estate developments, whether commercial, residential or retail. With large interstate migration to cities like Bangalore, Pune, Hyderabad and Delhi, India’s growing urban centers will benefit from these larger developments that will have the scale to provide world-class amenities such as sporting and entertainment facilities within the developments.

Technology-driven innovation: Like with so many industries, technology has had a positive impact on real estate. Digital marketplaces have revolutionized real estate investments and enabled investors to profit reliably, safely, and conveniently from the sort of exclusive property assets that used to be the domain of large institutional investors. Technology is also transforming construction, where the pressure to complete projects quickly is increasing demand for better construction methodologies, such as prefabricated construction technology.

Conclusion: This is a unique period for Indian real estate. It is being transformed in various ways, whether it be in financing, construction, specialization or scale. Developments, which used to be one-off projects, are being transformed into assets where continuing services are required. There are a host of new sectors like senior living, student housing, managed offices and logistics parks that are growing rapidly. New avenues are being created to profit from all this, such as AIFs and REITs. Technology platforms are greatly simplifying the process of finding the best investment opportunities, and regulations are creating a culture of transparency.

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Government will infuse ₹10000 crore in the fund while the remaining ₹15000 crore will be contributed by State Bank of India, LIC and other financial institutions. The fund will help incomplete housing projects of less than ₹Two crores per unit in Mumbai, ₹One and half crores per unit in other metros including national capital region (NCR) and ₹One crore per unit in other parts of the country get ready for move-in.

“We welcome the announcement by the Finance Minister to set up a `Special Window` in the form of AIF and dedicate a fund of 25,000 crore for the completion of stalled housing projects. The move is expected to create an avenue of relief to homebuyers and the developers in the sector. The specific fund is expected to revive 80% of the real estate projects. This action by the government will induce cash flow in the system and kick start the revival process. This decision will not only help in completing the stuck projects in this sector, but will also regain the confidence of buyers to invest in real estate. The benefit will surely be felt in NCR and Mumbai region.” – Ashish Sarin, CEO, AlphaCorp 

Falling prices, shrinking sales and piling inventory have collectively created hurdles before the developers. Situation was worsening as the fear of default made financial bodies reluctant to lend for these projects. The consequent slump in the construction affected current jobs and future job prospects. The move would help generate considerable employment opportunities.

In an another relief, the industry players facing insolvency proceedings are allowed to avail funds, who were earlier debarred from the September package. The fund will also be available for projects declared defaulters. All these inclusion will collectively improve market sentiments for the real estate sector.

But, to avail the benefits of the fund the projects need to be registered in RERA (Real Estate Regulation and Development Act). Besides, they should have a positive net worth. Projects declared an NPA or are before the NCLT but not asked for liquidation will also get benefits. Financially viable projects lacking funds will be at the core and will get benefits from the allocation.

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