The real estate market in Delhi NCR (National Capital Region) witnessed a healthy surge in supply of new residential units, 5,209 launches by various developers in the first three months of 2023, marking a remarkable 189 percent quarter-on-quarter growth, as per a latest PropTiger Report.
At the same time, Delhi NCR holds an 11 per cent share in the total unsold inventory among the top 8 cities in India. At the end of Q1 2023, the unsold inventory stood at 99,690 units, making it the city with the highest inventory overhang of 66 months compared to other major cities.
However, as Delhi NCR is one of the most important economic hubs in India, with a wide variety of job opportunities, educational institutions, cultural experiences, entertainment options, and connectivity to other parts of India and the world, it is among the top options for people who are looking to relocate.
Maneesh Upadhyaya, chief business officer, 99acres.com, said the real estate market is on its growth journey and the Delhi-NCR region is witnessing positive traction. Developers are bringing new projects with added features of enhanced security and luxurious amenities.
Edited excerpts of Upadhyaya’s views on real estate in Delhi-NCR
Latest trends from Delhi-NCR’s real estate market
The real estate market in the Delhi-NCR region has been one of the most dynamic and significant in India. The demand for real estate will continue to remain at an all-time high in the region this year. The growth will be primarily driven by millennials who are keen to invest in real estate, both residential and commercial properties.
Residential Market: The residential market in Delhi-NCR has witnessed fluctuations in recent years. Factors such as changes in government policies, economic conditions, and regulatory reforms like the Real Estate (Regulation and Development) Act, 2016 have influenced the market dynamics.
Developers have been focusing on affordable and mid-segment housing due to increased demand in these categories. Of all zones that Delhi-NCR consists of, the demand for luxury housing units has been highest in Gurugram – pockets along Golf Course Road, Sohna Road and DLF phases 1, 2, 3 and 4.
Commercial Market: Delhi-NCR has a robust commercial real estate sector with a significant presence in office spaces, retail properties, and industrial parks. Gurugram and Noida, in particular, have seen considerable commercial development and attracted several multinational corporations, IT companies, and startups in the last 4-5 years.
Infrastructure Development: Infrastructure projects such as the expansion of metro lines, expressways, and airport development have positively impacted real estate in the region. These developments have enhanced connectivity and accessibility, leading to increased demand for properties in areas benefiting from improved infrastructure.
Affordable Housing: The demand for affordable housing has been strong in Delhi-NCR, driven by the government’s initiatives such as Pradhan Mantri Awas Yojana (PMAY) and incentives for first-time homebuyers. Developers have responded by launching projects in the affordable housing segment. Housing pockets in Ghaziabad, Noida and Greater Noida have seen a number of developers coming up with mid-income and budget housing options as well.
Rental market: The residential rental market in Delhi has remarkably rebounded to normalcy after the impact of COVID-19. Both the demand for rental properties and rental rates have witnessed a substantial increase. Housing hubs near employment zones such as Noida-Greater Noida Expressway, and Dwarka Expressway have seen tremendous growth in rentals.
The impact of COVID-19 on the real estate market of Delhi NCR
They are launching properties at new price points but with lucrative deals that attract consumers. Whether it is a new project or resale, besides affordable housing, the luxury housing segment is witnessing surging demand. Even commercial projects like shops-cum-offices are equally enticing buyers and investors.
The Covid-19 pandemic inflicted a significant impact on the Indian real estate market, leading to notable shifts in the demand-supply dynamics.
Here are some of the key trends that emerged:
An initial slowdown in demand: The pandemic and associated lockdowns resulted in a slowdown in demand for real estate properties in the NCR region from 2020 for about three quarters. Potential buyers and investors became cautious due to economic uncertainties, job insecurities, and reduced purchasing power. This led to a decrease in property transactions and a dip in sales volume.
Delayed Construction and Project Deliveries: The Covid protocols and lockdown restrictions on construction activities caused delays in the then ongoing projects and project deliveries. Labour shortages, disrupted supply chains, and restrictions on movement hampered the progress of construction projects, impacting both developers and homebuyers.
Price Adjustments: In response to the reduced demand, developers in NCR made price adjustments and offered various incentives to attract buyers in the initial phase of COVID-19. Many of them offered discounts, flexible payment plans, free parking, and other promotional offers to stimulate sales and clear existing inventory.
However, such offers have been ceased and there’s an eventual reversing of COVID-19 price deductions in case of new homes. In the resale market, transactions had come to a halt due to restricted movement. But as soon as government restrictions were lifted, demand resurfaced for all resale property types – apartments, builder floors and houses – and prices returned to pre-covid levels. At the time, in the case of residential properties, people usually preferred ready-to-move properties or projects with low completion cycles.
Shift in Preferences: The pandemic brought about a shift in the preferences of homebuyers. There has been an increased demand for properties with spacious layouts, home offices, and amenities that support remote work and lifestyle changes. Buyers are also seeking properties in gated communities or those with open spaces and green areas.
Increased Focus on Digital Platforms: The real estate sector in Delhi-NCR, like in other regions, increasingly relied on digital platforms for property searches, virtual property tours, and online transactions. Real estate agents and developers adapted to online marketing strategies to reach potential buyers and investors.
Rise of Affordable and Mid-Segment Housing: The economic impact of the pandemic led to an increased demand for affordable and mid-segment housing in NCR. The government’s initiatives, such as the Pradhan Mantri Awas Yojana (PMAY) and reduced interest rates on home loans, further supported the demand for affordable housing.
Policy Measures and Support: To mitigate the impact of the pandemic on the real estate sector, the government introduced several policy measures. These included liquidity support, loan moratoriums, and regulatory relaxations to ease the financial burden on developers and homebuyers.
How are property prices and rental rates in different parts of NCR changing, and what factors are influencing these fluctuations?
In the pre-pandemic times, property prices were range-bound as there was a continuous slowdown in demand. However, property prices have surged significantly in the post-Covid period.
The NCR has experienced diverse changes in property prices and rental rates, influenced by various factors.
Here are some key area-wise observations:
1. In Delhi, both resale and new housing projects have seen price increases after the COVID impact subsided. The resurgence of pent-up demand for housing units in the capital city has been a major driving force.
As per price trends on 99acres.com – Sector-A, Vasant Kunj has seen 81% YOY price appreciation for apartments, Rohini Sector-35 has seen 71% YOY increase in property rates for plots/land and Uttari Pitampura has seen 48.4% price appreciation for builder floors in the last one year.
2. Several housing pockets in Noida, including Noida-Greater Noida Expressway and sectors in Central Noida, have witnessed price hikes. This growth can be attributed to improved connectivity through metro lines, flyovers, and underpasses, as well as upcoming developments such as the Jewar Airport announcement.
As per 99acres insights – Noida has seen 18.6% YOY appreciation in 20+ localities with Sector 121 seeing 130% YOY price appreciation. Sector 137 and 76 have seen the highest numbers of transactions in the last one year
3. The overall real estate market in Faridabad has remained stagnant, with only a few sectors, such as Sector 46 and 55, witnessing new project launches. The emergence of new homes in developing areas along the Dwarka Expressway in Gurugram has diverted buyers from investing in Faridabad.
4. Gurugram has experienced both increased housing demand and rising prices, primarily due to the launch of new projects by reputable developers and improvements in infrastructure. Areas across Gurugram have seen good price appreciation with multiple sectors like 42, 93, 102, 72 seeing 40%+ YOY increase in property rates
5. The housing market in Ghaziabad has seen established localities like Vaishali experience single-digit growth in the prices of resale properties. Additionally, the launch of new projects along NH-24 in areas like Siddharth Vihar has driven up prices by 30% in the last three years.
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