NCR Real estate prices may go up by anything between 10 to 15 per cent in the next six to nine months, with demand exceeding supply, real estate developers said today.

“The price is going forward. It is likely to increase by 10-15 per cent in the next six to nine months’ time,” Parsvnath Developers Chairman Pradeep Jain told reporters on the sidelines of a conference organised by Credai’s NCR chapter.

BPTP Chief Financial Officer Sunil Jindal also feels that housing prices in the National Capital Region are likely to increase by 8-10 per cent in the same period on the back of rising demand.

Both feel that the anticipated price rise would not have any impact on demand for housing units, since the gap between supply and demand is huge and the overall sentiment for the sector has improved since the downturn.

Demand Increasing
“Demand is huge. Now things have improved, funding has improved, purchasing power has improved. Hence, I don’t see any impact even if prices escalate further,” Jain said.

Delhi and NCR Real estate prices have gone up by 10-15 per cent in the last few months on increased demand.

“NCR real estate is short of five lakh housing units and there is an incremental demand of at least one lakh units a year. For the past few years, total supply in the region could not even meet the year-on-year incremental demand,” Jindal said, justifying the rationale for prices going up.

Excess supply has made office rentals in key commercial centres in Mumbai and Delhi come down by half over last year, and realty analysts fear that with business houses waiting for economic activity to pick up speed and a raft of new commercial facilities nearing completion, the rates could head further southwards.

Residential prices have firmed up after the lows they hit late last year, but the recent uptick in macro economic activity is yet to trickle down to sectors such as retail. Realty consultants said in Mumbai there are vacant commercial properties in Malad, Thane, LBS Marg and Andheri MIDC despite the fall in rentals. Rentals have crashed from Rs 400 per sq ft in December last year to around Rs 250 per sq ft now in Mumbai’s commercial hub, the Bandra Kurla Complex (BKC).

According to sources an FMCG company is asking for rentals at 35% lower rates than what it was a year ago for its 1.5 lakh sq ft office space in south Mumbai. Samsung recently took 90,000 square feet on rent on Gurgaon’s Golf Course Road for Rs 58 per sq feet against the asking price of Rs 80 a sq feet. In another deal, a tenant has leased out 50,000 sq ft at DLF Cybercity in Gurgaon for Rs 45-50 per sq ft while the quoted rent was Rs 60-65 per sq ft. “Since there is a downward pressure on many developers and building owners, one may witness even bigger deals at further lower rates,” said Kaustuv Roy, executive director, Cushman & Wakefield.

DLF, the India’s largest property developer, will soon conduct a poll among Indian property brokers to decide the pricing and number of apartments to be offered in the second phase of its Capital Greens project in West Delhi.

It’s a novel experiment, but property brokers in Delhi say the company is trying to test the waters in view of the vastly changed situation in the Indian real estate market.

Developers such as DLF, Unitech, Omaxe, Parsvnath and HDIL were among those that cut Indian property prices or forayed into mid-income housing, which were 25 to 30 per cent lower than prevailing prices, in the last quarters of 2008-09, as the economic slowdown and fears of Indian job losses impacted home sales. Indian property sales fell 50 per cent from their peak in 2007-08 (when prices had more than doubled froom 2004-05) as buyers stayed away.

Those days are rapidly becoming a distant memory, with many Indian developers increasing prices 15 to 30 per cent the moment they became sure of demand returning.

Real estate developers cannot be fined for late delivery of possession of a flat to an allottee if no specific date of its delivery is mentioned in the contract, the apex consumer body has held. The National Consumer Commission further held that the acceptance of the belated delivery of the flat in 1993 without protest renders it impossible for the consumer fora to award compensation to the buyer in this case.

The Commission passed the order on a plea of the allottee, Ashok Khanna, seeking compensation from the Ghaziabad Development Authority (GDA) for the late delivery of the flat and extra sum charged by it. “Where time is not the essence of the contract then the buyer, instead of rescinding the contract on the ground of non-performance, accepts the belated performance in terms of the delayed contract and then the question of any breach of agreement does not arise,” the Commission headed by Justice Ashok Bhan said.