Property Prices in Delhi-NCR Grow by 3% in Oct-Dec 2014: 99acres.com Insite Report

– Sector 31 in Gurgaon recorded a capital appreciation of 18 per cent, followed by Sushant Lok Phase-I (16 per cent), Sector-68 and 59 that rose by 15 per cent each and Sohna that rose by 13 per cent.

– The popular trans-Hindon localities in Ghaziabad – Kaushambi and Vasundhara – witnessed seven per cent capital appreciation each, whereas housing prices in Vaishali and Indirapuram jumped by five per cent and four per cent respectively in the Oct-Dec 2014 compared to Jul-Sep 2014.

– Bhiwadi which suffered due to the overall slump in Delhi NCR in Jul-Sep 2014, grew by five per cent in Oct-Dec 2014.

– The supply equation in Delhi remained unchanged with builder floors being the most supplied property type followed by society apartments in Oct-Dec quarter. Within builder floors, 3BHK ready-to-move units was the most supplied unit. For all other pockets in Delhi NCR like Noida, Ghaziabad, Greater Noida and Gurgaon, the number of under-construction society apartments was higher than all other property types.

99acres.com Insite is a quarterly report focusing on capital and rental price trends in residential real estate market across seven major cities of India. According to the report, property prices in Delhi NCR region witnessed a growth of three per cent in Oct-Dec 2014 as compared to Jul-Sep 2014. On the other hand, an annual comparison (Oct-Dec 2014 against Jul-Sep 2014) reflects five per cent rise in prices per sq ft. Rentals have witnessed an average increase of six per cent in the Oct-Dec quarter compared to the Jul-Sep quarter in 2014. Builder floors continued to be the most supplied property type in Delhi in this quarter as well.

Commenting on the report, Mr Narasimha Jayakumar, Chief Business Officer 99acres.com, said, “ With new governance at the Centre and impending elections in the state, Delhi NCR realty market is showing some signs of improvement after a sluggish patch of two years. Number of queries have considerably increased, however, the transaction volumes are still low.”

Price Analysis of Delhi NCR (Q4-14 vs. Q3-14):

Zone 1: Delhi North, West, East, South

Residential Apartments:

– Mayur Vihar Phase III has been the frontrunner in Delhi with an 18 per cent rise in the prices of residential apartments due to sound infrastructure and competitive property prices. A newly developing colony, Aaya Nagar, continues to show an upward movement and registered a growth of three per cent in Oct-Dec quarter compared to Jul-Sep quarter. Localities like Greater Kailash II and Vasant Kunj in South Delhi registered a rise of eight per cent and seven per cent respectively in Oct-Dec 2014 in housing prices owing to increasing construction costs and circle rates.

– In North-West Delhi, Janakpuri, Paschim Vihar and Rohini emerged as the top performing localities with 11 per cent, nine per cent and four per cent hike in property prices in the Oct-Dec quarter compared to the Jul-Sep quarter. Whereas, localities in East Delhi like IP Extension and Patparganj are facing tough competition from Ghaziabad where property is available at economical rates and infrastructure is continuously improving.

– Owing to previously inflated prices, price corrections and low sales volume, sectors such as 16, 18 and 17 in Dwarka have witnessed a depreciation of 16 per cent, nine per cent and seven per cent respectively in the property prices in the last quarter of 2014 as compared to the previous quarter.

Rental Analysis:

– The rental prices in Saket climbed by 19 per cent while Paschim Vihar witnessed a rise of 18 per cent in the Oct-Dec quarter compared to Jul-Sep quarter.

– Mayur Vihar-I in East Delhi and Kirti Nagar in West Delhi have also witnessed a growth of 10 per cent and 11 per cent respectively in the rental rates in the Oct-Dec quarter compared to Jul-Sep quarter.

– On the other hand, localities such as Vasant Vihar and Hauz Khas in South Delhi saw a fall of 20 per cent and 18 per cent in Oct-Dec quarter compared to Jul-Sep quarter.

Supply Analysis:

– Builder floors have dominated property supply in Delhi with the Oct-Dec quarter reflecting a 50 per cent share. The annual comparison of the builder floors has registered a growth of five per cent in Q4-14 as compared to Q4-13 due to insignificant changes in the supply. On the other hand, due to absence of new launches in the region, the society apartments are far lesser in numbers than builder floors and independent houses.

– High-construction costs and inflated circle rates have led to high-income segment being the most supplied in Delhi. Majority of residential units that fall in the price range of Rs 60 lakh- Rs 1 crore, reflected a growth of 15 per cent whereas the total supply for high-income housing segment in Delhi has gone up by almost 65 per cent. At the same time, the supply for affordable category in Delhi (property priced within Rs 40 lakh) has gone up by 120 per cent in the last one year.

– Owing to the new projects launched in affordable localities (within Rs 40 lakh) of Delhi, most of the supply is under-construction. Over 80 per cent of the properties within Rs 40 lakh range are ready to move while 20 per cent are under-construction. This indicates that Delhi has limited options for under-construction or new property for mid, high and luxury housing segments.

– For the last quarter of 2014, 3BHK emerged as the most supplied unit for builder floors and society apartments in Delhi followed by 2BHK, 4BHK and 1BHK. The trend has remained the same in Delhi for years owing to the preference given to more spacious apartments. Within the 3BHK category, more than three quarters is ready to occupy and the remaining is under-construction. Interestingly, even the least supplied unit, i.e. 1BHK has 90 per cent as ready to move and just 10 per cent under-construction inventory.

– Quarter-on-quarter comparison reveals that the supply of ready to move in 1BHK units has gone up by four per cent and the number of ready to move 4BHK units have gone up marginally by two per cent. Subsequently, supply of under-construction 1BHK units has gone down by four per cent while that for 4BHK units has dropped by two per cent.

Zone 2: Noida, Greater Noida and Ghaziabad

Residential Apartments:

– Surajpur in Greater Noida emerged as the most profitable investment zone with 20 per cent growth in this pocket owing to industrial development. Most other sectors located across the Noida-Greater Noida Expressway have performed well in Q4 14 primarily due to their location and sound infrastructure.

– In Ghaziabad, NH-58 has been among the frontrunners with close to 10 per cent appreciation in property prices followed by Kaushambi, witnessing a growth of seven per cent. Interestingly, capital rates in Govind Puram recovered post a 2-year long decline and registered a growth of nine per cent this quarter due to improved infrastructure connectivity links including proposed extension of NH-58. At the same time, Noida Extension (Greater Noida West) has recorded a growth of five per cent in Q4 14 compared to Q3 14.

– Localities such as NH-91, Lal Kuan and Bhopura in Ghaziabad witnessed a fall of 12 per cent, 10 per cent and two per cent in the Oct-Dec quarter compared to Jul-Sep quarter.

Rental Analysis:

– Rentals in Sector ZETA and ZETA I in Greater Noida appreciated by 33 per cent each due to supply of low cost furnished as well as unfurnished apartments on rent. Also, rentals in Ahinsa Khanda and Ahinsa Khand 2 in Indirapuram and Raj Nagar Extension in Ghaziabad jumped by 18, 20 and 17 per cent respectively in Q4 14 compared to Q3 14 owing to availability of basic civic amenities.

– In Noida region, sectors near Noida-Greater Noida Expressway like 137, 121, 120 and 110 recorded a growth by 5-10 per cent in rental values. The areas saw appreciation majorly owing to the location, connectivity and the improving infrastructure in terms of presence of schools, offices and colleges on both sides of the Expressway.

Supply Analysis:

– Society apartments continue to be the most supplied property type in all the three pockets – Noida, Greater Noida and Ghaziabad in comparison to builder floors and independent houses/villas, registering a growth of 10 per cent in Q4 14 compared to Q3 14, while an annual growth of 15 per cent. The supply of builder floors has doubled in the last one year whereas independent houses or villas are the least supplied property.

– Noida, Greater Noida and Ghaziabad cater to the affordable segment category the most with 35 per cent of its supply within Rs 40 lakh budget range. Out of these three, Greater Noida has the maximum supply of apartments in this range (43 per cent), followed by Noida (29 per cent) and Ghaziabad (28 per cent). Only a quarter of the total supply of residential apartments in these areas falls in the high-income housing (Rs 60 lakh- 1 crore) category where Noida stands at 60 per cent, followed by Ghaziabad (30 per cent) and Greater Noida at 10 per cent supply.

– It is notable that 70 per cent of the supply of residential apartments in Noida is currently under-construction and only 30 per cent is ready to move. On the other hand, Greater Noida has 75 per cent of under-construction and only 25 per cent ready to move inventory and Ghaziabad accounts for 60 per cent ready to occupy and the remaining 40 per cent is under-construction category. However, quarter-on-quarter analysis shows the maximum supply for both ready to move in and under- construction inventory for apartments, builder floors and independent houses fall in the affordable housing segment.

– 2BHK and 3BHK continues to be the most supplied units in Noida, Greater Noida and Ghaziabad in Oct-Dec 2014. 2BHK is the most supplied unit at 48 per cent in Ghaziabad followed by 3BHK (34 per cent), 1BHK (12 per cent) and 4BHK (6 per cent) during the same time.

Zone 3: Gurgaon, Bhiwadi, Dharuhera and Faridabad

Residential Apartments:

– With over 18 per cent capital appreciation, Sector 65 topped the list of best performing localities in Gurgaon followed by Sushant Lok-I with 16 per cent growth and Sohna with a 13 per cent growth due to significant developments in infrastructure.

– Capital values in Bhiwadi and Dharuhera jumped by six per cent and nine per cent each in the Oct-Dec quarter compared to Jul-Sep quarter. Affordability, connectivity, and upcoming industrial and infrastructural developments including widening of NH-8 and bullet train linking Alwar-Delhi-Panipat-Meerut from Dharuhera are making these pockets investment hotspots.

– Sectors on a growth radar in Faridabad include Sectors-80, 81 and 86 which fall under the Nehar Par area, followed by Eastern Peripheral Road and Western Peripheral Road which have also positively impacted the realty market.

– Prices of residential apartments in IMT Manesar dipped by four per cent in the last quarter of 2014 and remained unchanged in the last one year. The land acquisition row between farmers, builders and the Haryana Government in addition to civic woes such as lack of arterial roads and erratic power supply have contributed to this de-growth.

Rental Analysis:

– In Gurgaon, DLF City Phase IV topped the list of highest gainers in terms of rental appreciation with close to 80 per cent growth in the rental rates in Oct-Dec quarter. The sector is located adjacent to Cyber Park and hence demand from working migrants keeps increasing.

– Rental rates for localities along NH-8 continue to rise owing to easy connectivity via the Highway. Whereas in Faridabad, the sectors that witnessed high demand for rental spaces include Sectors-76, 86 and 87.

Supply Analysis:

– Society apartments are the most supplied property type in Gurgaon and Faridabad followed by builder floors and independent houses/villas. In Faridabad, residential apartments have more than half of the share in the total property supply. Similarly, society apartments account for maximum supply in Gurgaon. Independent houses/villas and builder floors are very few in numbers in both, Faridabad and Gurgaon.

– Due to high construction costs and inflated property rates, most properties in Gurgaon fall in the luxury housing segment. In other words, almost 60 per cent of the properties in Gurgaon are priced at Rs 1 crore and above. In Faridabad, however, the property segregation on the basis of budget is quite different from Gurgaon. Mid-income housing (Rs 40-60 lakh) and high-income housing (Rs 60 lakh-1 crore) have equal shares in the total property supply. Even affordable housing supply, i.e. property priced within Rs 40 lakh has a 20 per cent share and luxury housing supply, i.e. property priced above Rs 1 crore is the least supplied (10 per cent).

– There have been no major changes in the supply figures for both under-construction and ready to occupy property for Gurgaon and Faridabad. Affordable and mid-income housing categories (property falling within Rs 60 lakh) have the maximum supply in the under-construction category due to the launch of some affordable projects in Gurgaon in the last one year. Whereas in Faridabad, properties priced within Rs 40 lakh have an equal supply of ready to move in and under-construction inventory.

– 3BHK is the most supplied category in Faridabad and Gurgaon, followed by 2BHK, 4BHK and 1BHK. Within the 3BHK configuration, ready to move in inventory is slightly more than under-construction apartments. More than half of the 2BHK units in Gurgaon and Faridabad are under construction indicating that the supply for these units will increase considerably in the coming 2-4 years.

Residential Land analysis:

– Scanty land parcels in Delhi have opened doors for micro-markets in NCR that are becoming favored choices for investing in residential land. As a result, Tronica City and Govind Puram in Ghaziabad are among the top gainers in the Oct-Dec quarter, having witnessed a rise of 35 per cent and 15 per cent. On the other hand, the popular areas of South Delhi – Chattarpur and Vasant Kunj saw a fall of 22 per cent and 19 per cent in prices of residential land in Oct-Dec quarter compared to Jul-Sep quarter.

– Other localities that witnessed price appreciation include Sector 41-Noida, Sector 31-Gurgaon and Sector 50-Gurgaon. The growth in these localities is attributable to increase in ask prices by sellers as well as good connectivity to adjoining localities.

– Land prices in Yamuna Expressway (also known as Taj Expressway), however, fell down by 18 per cent majorly due to the new Land Acquisition Act by Yamuna Expressway Industrial Development Authority’s (YEIDA) announced in July 2014.