Thanks to regulatory changes in the recent past, almost all major real estate markets in the country have been positively impacted. However, interestingly enough, Delhi NCR is witnessing one of the strongest recoveries. The residential real estate market of Delhi NCR is presently undergoing slow recovery, with the old benchmarks in sales volumes regaining prominence, while product offerings by developers are also gradually coming to the forefront. A look at the first half of the year reveals that things have been taking a positive turn for Delhi-NCR, with nearly 90% jump in new housing unit launches which stood at a little more than 9000 units in the first half of 2018. The aggregate jump in value of residential units sold in the first half of 2018 stood at 25% as compared to the same period last year. This has simultaneously led to enhanced awareness amongst real estate developers who are now aligning their offerings with the market realities.
Several key trends have been observed with regard to the Delhi NCR real estate market for the first 10 months of the year. Buyers are in today’s times, more inclined towards established developers who enjoy a reputed brand image. The recovery of sales has been particularly noticeable for properties for Grade A developers. This has consequently led to emergence of a new business model where land owners and larger developers are entering into tie-ups, besides pooling in funds for project completion.
Another point worth noting is that with RERA playing a crucial role, there is overall more transparency in the market. Be it documentation, project details, business practices, or escrow services, all these aspects have been rendered fairer and more transparent due to RERA. The judiciary has also done its part to bring discipline into the market.
The recovery in the real estate market of Delhi NCR can be majorly attributed to the popularity of the affordable housing segment. Houses of up to 30 sq. metres have particularly emerged to be buyers’ favourite, accounting for about half of all the home sales in Delhi NCR in 2018. In order to be in sync with the reality, most of launches of new property by developers have been in the affordable segment. These new projects have been announced not just in Ghaziabad and Noida but also in Millennium City Gurgaon which has traditionally maintained the picture of a slightly premium market. It is also to be noted that reduction of GST from 12% to 8% on affordable housing in 2018 has allowed developers to make such houses even more value-for-money proposition.
Buyers are showing renewed interest in certain micro markets, with procedural bottlenecks being done away with coupled with actual commencement in the case of some other infrastructure projects. These micro markets have consequently become key real estate hubs. Jewar airport and other infrastructure projects are picking up around Yamuna Expressway, which has made this micro market a preferred destination. As far as Sohna Road in Gurgaon is concerned, similar trend is being observed. Both the micro markets have witnessed brisk sales of residential units in 2018 so far along with significant launches by developers.
The major funding sources that have come to play a key role for real estate developers are private equity funds and foreign investments. With the market transparency gradually rising, the real estate sector has managed to draw handsome foreign and equity investments. Some joint ventures are also materializing in this space.
Square Yards is a technology-enabled, global real estate aggregator and India’s largest player for primary residential real estate. It’s subsidiary Square Capital is one of the largest marketplace for secured mortgages in India. Square Yards platform offers an integrated consumer experience & covers the full real-estate journey from search, discovery to research, transactions, home loans and post-sales service – fully integrating buyers to an extensive network of 500+ partner real estate developers, and 90+ banks & NBFCs. Square Yards is led by accomplished professionals, ex-bankers, and Ivy school alumni and is backed by the competence of more than 2500 employees in 30 cities and ten countries.