By Mr.
Santhosh Kumar, JLL India
Delhi - NCR Residential Real Estate 2012..!
The on-going
liquidity crisis, high interest rates and persistent inflation levels kept the
residential property market in NCR subdued in 2012. There were comparatively
lower transaction volumes, though some of the micro-markets clearly
outperformed the rest and remained promising bets for investors.
Gurgaon’s residential
market performed decently in 2012, but the performance was not uniform all
across. There were high levels of unsold inventory in some of the projects,
while many others sold exceedingly well.
Golf Course Road,
Golf Course Extension Road and Sohna Road achieved handsome appreciation in
both capital values & rentals. These regions can be classified as the best
performing pockets in Gurgaon for 2012 in terms of sales volume and
appreciation achieved.
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| Santhosh Kumar, JLL India |
The factors that
worked for them were their good connectivity with New Delhi through the 6 -
lane NH-8 and MG Road, providing quick and easy access to the New Delhi
International Airport, and the 14 KM Southern Peripheral Road (SPR) which covers
all the major developments in this part of Gurgaon and connects MG Road &
Golf Course Extension Road with NH - 8.
However, the most
sensational performer in NCR region for 2012 was Dwarka Expressway. Its
proximity to the international airport and the proposed diplomatic enclave,
along with its rapidly evolving infrastructure & good connectivity with
west Delhi and Gurgaon continued to work in this region’s favour.
There was high level
of interest by investors in this region, resulting in price appreciation and
high sales volumes in 2012.
At the start of the
year, projects were pegged at about Rs. 4,000 per square fee. and were at Rs.
7,000 per square fee. towards the later part of 2012.
This price
appreciation did hurt the region’s affordability tag, which used to be its USP,
and thus alienated a significant section of end users.
The region also saw a
high level of supply to tackle the absorption by investors.
Residential demand on
Golf Course Road was driven by heavy demand from corporates.
Projects there
witnessed an average appreciation of nearly Rs. 1,500 to Rs. 2,000 per square
feet, thereby taking the price point to an average of Rs.12,000 to Rs. 15,000
per square feet.
Golf Course Extension
was also a hot destination for residential real estate in 2012.
Projects like Pioneer
Park & the IREO projects saw capital appreciation of around Rs.1,500
to Rs. 2,000 per square feet, thanks to
this area’s vicinity to Golf Course Road & various other locational
advantages.
With good quality
supply under construction and more affordable options, Golf Course Extension
witnessed a high level activity from investors looking for lucrative returns
over an investment period of 3 to 4 years.
However, it did not
find a lot of traction with end users looking for ready-to-move residential
options, as most of the projects were under construction in 2012.
Sohna Road saw very
decent residential sales levels since it is more affordable than Golf Course
Road and Golf Course Extension & had a steady supply of ready-to-move units
to offer. This made it a location of choice for end users.
Projects on Sohna
Road appreciated by about Rs.1,500 to Rs. 2,000 per square feet., bringing
price points to the current average of Rs. 8, 000 to Rs. 9,500 per square feet.
Sohna Road also
benefited from the cyclical impact of high-level leasing of office space by
companies to base their office out of the area.
This, in turn,
generated the demand for residential options which further augmented the office
leasing activity.
Yet another region
whose residential market did well in 2012 was Noida, in particular Noida
Extension and Noida Expressway. The Noida Extension region was mainly driven by
end users due to the affordability of available options.
Some of the projects
in the Extension area achieved an appreciation of 25 per cent over their
start-of-year values.
Noida Expressway was
able to maintain its appeal due to its positioning as a commercial hub and its
affordability when compared with Gurgaon or / Delhi. The demand was equally
balanced between investors and end users. Overall, Noida’s residential realty
market achieved an appreciation of about 20 per cent in 2012.
The Delhi residential
property market did not see very impressive action, largely due to exorbitantly
high rates and very limited supply. Capital value appreciation remained
lackluster - price points in South Delhi either remained stagnant or / even
witnessed marginal decrease.
West Delhi did not fare
much better. Appreciation was moderate, but better than south and east Delhi.
Major infrastructural reforms such as improving road infrastructure, the
burgeoning affluent section of residents here and the rising income levels of
the general population were points in its favour.
In other NCR areas
such as Faridabad, performance was not up to the expectation. Neharpur was
unable to build on its past record and demonstrated very minor appreciation in
2012. On an average, appreciation in Faridabad’s residential market maxed out
at about 10 per cent in 2012.
About the author..!
Mr. Santhosh Kumar is
CEO – Operations at Jones Lang LaSalle India
Santhosh Kumar, CEO –
Operations, JLL India
+91 124 460 5000
santhosh.kumar@ap.jll.com
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