The Gurgaon real estate market has witnessed rising values to the tune of almost 30% since the downturn of 2008. This was at a time when it was raining affordable properties in other parts of the NCR. So what makes property in Gurgaon so popular?

Property in Gurgaon, NCR, Delhi www.navyroof.com

Sales of property in NCR rising
Aditya Bansal of the ABW Group who build property in Gurgaon was a chance to engage in integrated development after years of making their mark as developers of small, luxury properties in South Delhi. He says: “We believe that with the revival of real estate in India, the sale of residential property in the NCR region have gone up and are growing with time. The newly launched projects are also receiving overwhelming response from end users. This fast recovery of Indian real estate in the past few months, rising interest of customer and launch of state-of-art projects in this area is a testament of increasing confidence of customers in the NCR residential property segment.”

Metro driving Gurgaon property prices
The advent of the Metro has definitely given a boost to the growth of Gurgaon’s real estate. Saund says: “Places where the Metro has been announced have already seen a jump in values. Also the enhancement of the sector road infrastructure has been another boost. With the Metro walking the talk, citizens are more inclined to believe the commitment of the authorities in keeping to the sector roads schedule as well.”

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Delhi property rentals have gone up by 12 per cent on an average in Delhi and NCR in the April-June period of the current year compared to the same period last year, real estate portal report has said.

Property rentals in Delhi/ NCR www.navyroof.com

Vasant Kunj and Dwarka most affordable
“Both Vasant Kunj and Dwarka seem to have emerged as the most affordable rental destinations in Delhi for the middle income group,” it said. Key localities in East and West Delhi have seen an upward trend in rental prices with areas like Patparganj, Vasundhara Enclave and Mayur Vihar witnessing a 12 per cent increase in rental values during the April-June over the same period last year.

Delhi rental prices set to increase further
Localities like Vikaspuri and Janakpuri of West Delhi saw 13 per cent and 8 per cent increase in rentals, it said. Within the Central and North Delhi, Connaught Place has seen an 8 per cent rise in rental prices, while Rohini and Pitampura saw a 37 per cent and 35 per cent increase. The report said that in the future as well rentals would only escalate. “Since there has been no new supply coming in immediately in the region, property in Delhi rental values will continue to escalate on a yearly basis,” it said.

The Delhi government’s decision to increase the circle rates might prompt a revision in Delhi property tax rates upwards too.

Experts feel as the circle rates have been increased by up to around 200% in certain areas, the Delhi property tax will be revised by around 100% in these areas.

With regard to property in Delhi, property tax is fixed on the unit area basis. As the property prices are high in the posh areas – which are kept in the higher categories – the circle rates are fixed at a higher rate.

Similarly, the property tax rates in those areas are also pegged at higher levels.

Property in Delhi

The property market in India has become one of the biggest sectors in India always buzzing with activity. It was hit by the global fiscal flu that caught the economies of the world for eighteen months but has been on the revival path from last two quarters.

Prices becoming unaffordable
The real estate in Delhi, Mumbai and other metros like has become unaffordable as prices sky rocket owing to the supply deficit.

Delhi, the national capital, is the hottest investment destination in India today followed by metros and tier-II cities. The prices of property in Delhi have become exorbitant with it emerging as the 11th costliest property market in the world in a survey conducted by global realty consultant CB Richard Ellis (CBRE). Delhi is the nerve centre of all political, commercial and cultural activities and preserves its old-world charm while being the centre of most modern achievements of the country. Despite its limitations in terms of space, the city offers world class commercial and residential property- be it apartments, retail space, builder floors or independent houses. Even neighboring areas of the city like Gurgaon, Noida, Greater Noida, Ghaziabad and Faridabad are also benefiting with large-scale property developments in Delhi.

Too expensive for the common middle class
One of the reasons of the high property prices in Delhi is that it is home to numerous politicians, bureaucrats, industrialists and top notch corporate professionals. With them opting for high priced properties, the real estate in Delhi is becoming too expensive for the common middle class. Along with this, whenever new projects come to the city, the property rates of the surrounding areas begin to grow automatically. The introduction of Metro trains has been one of the primary reasons for hike in property prices all around East, West, North & Central Delhi and even in Noida. It is soon to extend to South Delhi and Gurgaon bringing in higher value to the already posh area. Apart from that, the forthcoming event of Commonwealth Games in few months from now will bat in favor of high realty values in both Delhi and NCR.

Delhi is becoming an investment hub
Real estate in Delhi is becoming an investment hub not only for nationals but also for NRIs and foreigners. With the government allowing FDIs in Indian realty sector, another dimension for growth has been added, fostering up the prices. Property buying is the result of either habitation/ need based or for investment purposes. The positive growth of the economy and an increase in purchasing power or disposable income of the people has also been stimulating the property rates. In addition to all these factors, the availability of home loans and easy EMIs spanned over a long period of time encourage more and more people to buy property in Delhi. This raised the demand while intensifying the shortage in supply of the property in the capital city.

Residential and retail
Currently, Delhi real estate is focusing on two segments-residential and retail. Affordable housing is the buzzword in the property sector while retail is flourishing at its best all around the country. Residential property in Delhi is especially a favorite with many for both buying and investment purposes. The concept of quality housing is also doing rounds with more and more developers offering affordable living spaces of international standards. Not only have the property values increased, even rentals in Delhi have started burning a bigger hole in pocket. With growth in mall and multiplex culture, retail realty in Delhi is also multiplying manifold.

New Delhi real estate will soon have a regulator by the end of 2010. Urban Development Minister S. Jaipal Reddy said Thursday. He also said the government was talking to other states to have similar regulators.

“The state governments have sounded positive. It would take time to happen. But Delhi will get a regulatory authority for the real estate by this year,” Reddy told.

He said the legislation process for the real estate regulator for Delhi would soon be completed as the draft bill has been circulated to the stakeholders.
According to him, the regulator once in place would prevent Delhi real estate players from indulging in unnecessary profiteering.

The minister also said the Delhi Metro rail will stretch to 190 km in the national capital region (NCR) by the time the Commonwealth Games start here October 3.

Delhi real estate: India’s largest real estate company by revenue, DLF, today stated that it has sold more than 1,200 units of the Panchkula Valley project in less than a week of opening sales.

Is this just an up turn in real estate in Delhi or are we seeing an emerging trend with real estate in India? Navyroof.com would argue, while there are hot spots of improvement especailly in Delhi, the NCR and other metros , the Indian real estate market has a long way to go to post crunch levels of activity, but things are beginning to move especially in the mid to lower end of the market.

“As against the 500 apartments of various sizes with independent floors announced under the first phase of the project, more than 1,200 bookings have already been received from across the region within the a week of the launch”, stated a release from the company. About 650 units were sold on the first day of sale.

Infrastructure development, fuelled by the upcoming Commonwealth Games, has ensured that Delhi real estate is emerging as the most preferred real estate market in the country. After a less than perfect start to 2009 — the global economic meltdown took its toll — the road to recovery has been quick and lucrative.

The experts agree: a report released by Ernst & Young in November listed Delhi real estate as the “most preferred market” in India, followed closely by Mumbai. Some of the factors that pushed Delhi to the coveted spot, as highlighted by the report, include massive improvements in infrastructure — a well-connected metro service, a modern International airport, road widening projects, new flyovers, underpasses, walkways and high capacity buses.

Another report by Pricewaterhouse Coopers and the Urban Land Institute has listed Indian real estate the top investment market in Asia in 2010 with a particular focus on Delhi real estate.

Real estate values have reached new heights along Metro routes in Delhi, a study has found, revealing that a Metro station in the locality pushes up prices by at least 22 per cent.

At the ongoing Urban Mobility Conference in the Capital, Professor H M Shivanand Swamy of the Centre for Environment Planning and Technology (CEPT) in Ahmedabad said he has studied the impact of the Delhi Metro on real estate in three phases. “We researched the pre-construction phase (1990-1996), the under-construction phase (1996-2000) and the post-construction phase (2001-06) in Delhi. We found that property rates jumped significantly after the Metro began operations. There was only a slight increase in value in the two previous phases,” the CEPT’s associate director said.

The Metro has also ‘flattened the curve’ Swamy said, as his study has established that property prices around stations that are at the peripheries of the city have considerably closed the gap with those at city centres. “While this gap is still 35 per cent, prices along Dwarka and Rithala routes have risen significantly,” Swamy said. The study points out that prices are highest within 500 metres of Metro routes. As one moves away, the impact on price rise decreases, he said. Proximity to the Metro has proved more beneficial for commercial properties, the study states.

“In residential areas, land value within 500 metres of the Metro line increased by 11.3 per cent on average. In commercial areas, the land value within 500 metres increased by 18.1 per cent. The threshold value for residential properties is approximately up to 500 metres from the Metro line, whereas the limit increases to approximately 800 metres for commercial properties,” the study states. Swamy said: “The impact on land value, however, is greatly dependent on the income of the people occupying the areas. In areas like East Delhi, where unauthorised colonies run along the Metro line, the increase in property is not significant. “The analysis holds true only for planned and authorised areas.”

The Indian capital Delhi has moved two notches up and has re-entered the top 10 list of the world’s most expensive office market, while the financial capital Mumbai has slipped one notch down, even as globally demand for office space has been softening, says a report.

The Capital has moved up to the 10th slot, from the 12th position it held six months ago, whereas Mumbai dropped from the 6th slot to the 7th, says the semi-annual survey ‘Global Office Rents’, by real estate consultancy CB Richard Ellis.

While Mumbai commanded a rent of $121.11 per square feet, Delhi was lower at $ 88.92 per square feet as on September 30, 2009, says the report released today.

UK-based serviced office provider Avanta, which blocked properties at the peak of the realty boom in India and started offering office space to clients during the downturn, is in the process of shutting down its Mumbai operations after incurring significant losses.

With the closure of the Mumbai operations, Avanta will be left with just one-fifth of its total one lakh sq ft office space in India.

“We are closing down our office in Bandra Kurla Complex (BKC) purely because it had become unviable. While our cost remained high as we had leased space at the top-end of the real estate boom in 2007, the rentals for workstations had fallen 60-70% in Mumbai,” said Avanta sales & marketing director Amit Bansal. Avanta is shutting down its 50,000-sq ft office at BKC in Mumbai after landlord Wadhwa Developers refused to bring down lease rates.

Mr Bansal insists that Avanta is not exiting India for now and will search for joint venture partners in India to provide services from now on as it will reduce its capital requirement. Avanta, which initially had a target of opening 10 business centres, has invested $10-12 million (approx. Rs 55 crore) in India so far and incurred a loss of Rs 20 crore in a little more than a year. The banks in England have now refused to release fund making it difficult for Avanta to absorb further losses, Mr Bansal said.