GURGAON: City of Opportunities

As the country limps back to normalcy, housing demand in micro markets of Gurgaon is likely to witness a surge. Construction Times takes a peek into this emerging market.

Indian real estate sector has been witnessing unprecedented times in the last few years due to various reasons. After suffering a setback due to the various policy decisions, including demonetisation, GST, RERA, etc, taken in a short span, the real estate sector was adversely impacted by the Covid pandemic. Interestingly, all these shocks have made the real estate sector more resilient than ever before.

Similar to the trends in major metros, Tier 2 and 3 cities have also witnessed a bounce back in real estate demand in the post Covid era. As more and more people get vaccinated and businesses resuming to normalcy, the overall sentiment has improved, which is a positive for the real estate sector.

Touted as the millennium city, due to the confluence of a number of multi-nationals including top IT/ITES companies and firms from the BFSI, retail, consulting services and e-commerce in the city, Gurgaon forms a prime market in the National Capital Region. Backed by a strong infrastructure and robust connectivity with other parts of the region, the city has a flourishing residential and commercial real estate.

Gurgaon is also one of the few progressive cities in the country that has a well-established town and country planning mechanism, an advanced land pooling policy and a RERA machinery, making it an ideal model of development for other cities.

ecent report by property consultant Ananrock revealed that in Q3 2021, housing sales surged 113% year-on-year across the top 7 cities - from nearly 29,520 units in Q3 2020 to nearly 62,800 units in Q3 2021. While the MMR region accounted for 33% of the total sales, NCR followed the trail with a 16% share.Meanwhile, new launches in the top 7 cities rose by 98% yearly - from around 32,530 units in Q3 2020 to approximately 64,560 units in Q3 2021. Reports revealing Anarock data state that nearly 50,000 affordable homes, including 16,000 in Gurgaon would be available for sale by December-end.

 “Gurgaon residential market is witnessing significant demand and has already improved the pre Covid level. The uptick in the residential sector can be seen both in terms of new launches and demands. Policy level change in terms of DDJAY (Deen Dayal Jan Awas Yojana) and Haryana Affordable Housing Policy which allows residential development on more than 5 acres land parcel has provided a much-needed breather to the developers,” Arvind Rai, Director - Valuation Services, Colliers India said.

Developers including Smart World Developers, DLF, Signature Global, Anant Raj, etc have launched multiple independent floor projects under DDJAY and are witnessing robust traction.

"In Q3 2021, significantly improved job security and robust hiring in the IT/ITeS and financial sectors piggybacked on record-low home loan rates and growing homeownership sentiment. The ongoing WFH culture continues to influence residential sentiment on two major fronts - overall housing demand and unit sizes. The fast-paced vaccination drive is an added sentiment booster, especially in terms of increased site visits.With the overall new launches increasing by 98% and housing sales skyrocketing by 113%, Q3 2021 stands in stark contrast to this period last year. MMR and NCR together accounted for nearly 50% of the overall housing sales in the quarter,” Anuj Puri, Anarock Group Chairman said

Property Prices

According to a report by Anarock released in April this year, five markets in the NCR region, including Greater Noida West, Noida Sector 150, Raj Nagar Extension in Ghaziabad, Dwarka Expressway in Gurgaonand Central Noida witnessed a 1.6-3.4% in prices of residential properties since 2017. The price rise was backed by a robust demand in the previous quarters.

“The price of plots in already developed colonies has also appreciated significantly since Covid 2nd wave. The appreciation in residential plots across Gurgaon is in the range of 20% - 40%.A significant rise in demand is also witnessed in residential apartments and it has already led to an increase in its price. The appreciation for residential apartments during the same period has been in the range of 10% - 25% across the micro-market. Demand in fresh and resale is quite high in the just-completed residential projects than those which are old construction,” Rai added.

Outlook

According to Shishir Baijal, Chairman and Managing Director, Knight Frank India, there has been anexciting improvement in sales and launches in Q3 2021 across the key markets.

“Sales momentum that picked up in thebeginning of the year has sustained in Q3 2021. The market seems to have factored in the very lowlikelihood of a complete lockdown as was seen last year due to the ample availability of the Covid vaccine. Comparatively lower residential prices, attractive interest rates and higher householdsavings rate over the past year should support housing demand going forward. With the upcomingfestive season, the market is gearing up for new project launches and consumers are likely toreciprocate. While financial stress remains a significant factor for developers across markets,homebuyers' preference for grade A developers and their access to cheaper credit has positionedthem well in this recovering market,” Baijal added.

As Rai sums up, “The relaxation in development control regulations, stability, and security on account of reduction in Covid cases, the fast pace of administering Covid vaccine, return of the economy to pre Covid level, job security, lower interest rate, and the festive season are propelling the demand for houses and it is leading to unprecedented demand and price appreciation. The momentum is set to be continued for quite some time which may further result in to increase in new project launches.”

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