Why Is Everyone Talking About Logical Way Of Seeing Real Estate Price Corrections?

Buying a house is an important milestone and a lifetime decision for most Indians. After years of saving and diligent planning, one decides to purchase a house. In addition to the increased social stature and financial security implied in home-ownership, a home purchase also helps in big-time tax savings. Also, instead of paying fat rentals, one creates an asset which will appreciate over the long term.

A cursory look at average property prices reveals that overall across the top 7 cities, there isn’t too much variation in 2017 as compared to the previous year. Also, property prices differ in each city and also vary as per the location and its inherent growth drivers. Generally, developers are not in favour of visibly reducing the prices as it transmits negative sentiments in the market.


However, a deep-dive assessment of the market conditions reveals that a pseudo-price correction has come in the form of freebies, discounts, offers, schemes, etc. Also, buyers who sit across the table in a developer’s office with a token amount cheque, discounts, and reduced prices are surely offered. Developers are battling with huge unsold inventory and in addition, 1.72 lakh unsold units are likely to complete in 2018. With so much ready-to-move-in (RTM) inventory, developers are keen to offload the same at the earliest.

RTM units with Occupancy Certificate (OC) do not attract GST, so purchasing such properties can be beneficial for buyers. In addition, with rising inflation, interest rates are likely to harden in the future, so for buyers, it is the right time to avail of a home loan at the best rates.

All-in-all, this could be the ideal time to purchase a house for end-use. The market is a totally buyer-friendly at the moment. If one has good financial planning and feels that the future is safe, it is the right time to purchase a house and seal the deal.

A home purchase must be seen as a long-term investment, and aptly-selected properties – those in good locations and with the right configuration and amenities – always appreciate over the long term. However, it is important to understand that the fundamentals of location, connectivity, good amenities and legal soundness of the project are essential for price growth to happen.

Also, there are bound to be price fluctuations in the current market scenario.  Buyers should keep a minimum horizon of 5-6 years before putting the property on the market again. At the end of a sufficiently long period, prices for the right kinds of properties will certainly have appreciated – and in the meanwhile, if the home is not for personal use, it can earn rental income as well.

The way for normal middle-class homebuyers to address a property purchase is to think like an end-user and focus on buying a home that meets one’s own needs. In doing so, one tends to automatically pick properties which have the right attributes – connectivity to workplace hubs, availability of public transport, hospitals, schools and shopping – and is resultantly investing in a property which can certainly appreciate.

Price corrections tend to happen in projects and locations which are bereft of the right fundamentals. Areas which have not taken off because of lack of the requisite civic and social infrastructure, and projects whose legal veracity is in question, are bound to see price corrections as demand will flow to areas and projects which have the right attributes. Prices in locations and projects which tick all the right boxes may remain stagnant for a while, but their inherent advantages will safeguard against any serious short-to-mid-term corrections.

Finally, one should remember that every asset class witnesses fluctuations, but homes are also ‘performing assets’ which one can live in or rent out. Meanwhile – and keeping in mind that the property needs to have been intelligently chosen – the inevitable laws of demand and supply gradually bring on capital value appreciation.

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Never Changing Delhi-NCR continues to be attractive to end-users and investors: An Analysis: ANAROCK Property Consultants

Despite being hit by the overall slowdown in the real estate market and seeing price corrections up to 10% in most areas, Delhi-NCR continues to be attractive to end-users and investors. Being the national capital, Delhi attracts migrants from all across the country. In fact, as per the Economic Survey of 2017, Delhi, Noida, Greater Noida and Gurugram saw the maximum influx of migrants between 2001 and 2011. Obviously, there is a dire need to fulfill the housing needs of these migrants.

As per ANAROCK data, the housing supply in Delhi over the last two years has been fairly low as compared to its counterparts – Gurugram and Noida. This is essentially due to demand-supply mismatch; there is massive demand for affordable housing in the city, while property prices in most pockets of the city have skyrocketed.

Consequently, the pockets that offer affordable or mid-segment projects have been performing relatively better than the expensive ones – such as Greater Kailash II, Panchsheel Park, and South Extension II, to name a few. In 2018 as well, it is the affordable micro-markets which are driving real estate growth in the city. Besides affordable prices, improved metro connectivity in these areas will also attract prospective home buyers.

Let’s take a closer look at Delhi’s most vibrant affordable housing hotspots:

  • L-Zone (Dwarka): Strategically located between Dwarka, Gurugram, and IGI airport, L-Zone is among Delhi-NCR’s most preferred property hotspot in 2018. Proposed to be developed as a Smart City, the area will have all modern facilities including solar power stations, rainwater harvesting, and camera surveillance – all very much needs of the hour in Delhi. In fact, as per ANAROCK data, nearly 2,050 units have been launched in the L-Zone over the past two years, with the maximum supply being in the mid-range segment (Rs. 40 – 80 lakh), followed by the affordable segment (< Rs. 40 lakh). The weighted average price of properties here is Rs. 3,454/sq. ft.
  • Uttam Nagar: Located in West Delhi, Uttam Nagar has shown massive real estate growth over the last few years. Affordable property prices have kept the momentum going here, with the current capital values ranging between Rs. 3,150 – 6,050/sq. ft. The monthly rentals for a 1BHK are as low as Rs. 5,000, thereby luring several existing homeowners to redevelop their old standalone properties and build more floors for good rental returns. Another factor driving real estate growth here is its easy connectivity to all major areas, including Dwarka, Vikaspuri, and IGI airport via the multi-nodal transport system. The combination of affordability and accessibility makes Uttam Nagar a good option for those looking to invest in Delhi-NCR.
  • Rohini: Home to two metro stations, Rohini in north-west Delhi continues to be a popular housing destination for end-users and investors alike. The locality boasts of excellent connectivity to other major areas via metro. Additionally, its proximity to the Bawana Industrial Area has triggered developments along Rohini’s Phases 4 and 5. Capital values range anywhere between Rs. 7,300-12,500/sq. ft., which is far cheaper than several other localities in the vicinity. Despite traffic and woes, rising pollution level and safety concerns, people still find Delhi to be a favorable place to live in because of the ample job opportunities it offers. However, neighboring Gurugram has not lost its magnetism, either.

Gurugram Real Estate – A Hotspot Check

An on-ground check post recent infrastructure developments like flyovers, underpasses, etc. reveal that quite a few localities in and around the Millennium City are expected to gain real estate momentum. Significantly, the state government’s move to reduce the circle rates in most localities in 2017 has made it easier for developers to gradually clear their unsold ready-to-move-in stock in Gurugram.

Let’s examine which micro-markets are witnessing maximum activity in 2018:

  • Sohna: AKA ‘South Gurugram,’ Sohna has found favor among affordable housing seekers due to its proximity to various office and industrial hubs. Backed by well-planned infrastructure, Sohna saw the most real estate activity in Gurugram from January 2017 onward, with a fresh housing supply infusion of almost 4,600 units. Almost 50% of this new supply was in the affordable housing category (< Rs. 40 lakh), followed by an equal mix of mid-segment (Rs. 40-80 lakh) and luxury segment (Rs. 80 lakh – 1.5 cr) flats. ANAROCK data further reveals that out of the overall supply, close to 2,350 units will be ready for possession in the next couple of years as developers are taking RERA’s stringent penalties with regards to delivery delays quite seriously. The weighted average price of residential properties during this period has been Rs 4,370 per sq. ft.
  • Sector 65: Proximity to key office hubs, convenient access to HUDA city metro station and its well-defined social infrastructure qualify Sector 65 as a bona fide Gurugram real estate hotspot in 2018. Located on Golf Course Extension Road, Sector 65 witnessed the launch of close to 1,600 units from January 2017 till date, with the supply comprising of homes priced between Rs. 6,900 – 10,000/sq. ft. All the projects in question are fairly large with over 500 units, which means that their final completion can be pegged to within a timeframe of 3 years or more.
  • Sector 68: A preferred locality for both office and housing developments, Sector 68 continues to be attractive to developers, end-users, and investors. Sound social infrastructure and good connectivity via the Golf Course Extension Road and NH 248A have added advantages for Sector 68. ANAROCK data indicates that this micro-market saw the launch of close to 1,500 housing units from January 2017 till date, with their completion pegged at within 2-3 years. With the weighted average price here being Rs. 4,090/sq. ft., its affordability factor makes Sector 68 score quite well over other localities. With the dust of new policies like RERA and GST finally settling, 2018 is definitely seeing Gurugram’s realty market heading northward. Among many other factors, the increased economic activity of 2017 and a number of key infrastructure upgrades such as the widening of NH 8, expansion of Sohna Road and rapid metro connectivity have served the city’s realty market well. As it always is, infrastructure development has been a key market driver for Gurugram and has convincingly vouchsafed its future growth potential.

Delhi-NCR Real Estate – The Growth Story Continues

Despite being hit by the overall slowdown in the real estate market and seeing price corrections up to 10% in most areas, Delhi-NCR continues to be attractive to end-users and investors. Being the national capital, Delhi attracts migrants from all across the country.

In fact, as per the Economic Survey of 2017, Delhi, Noida, Greater Noida and Gurugram saw the maximum influx of migrants between 2001 and 2011. Obviously, there is a dire need to fulfill the housing needs of these migrants.

As per ANAROCK data, the housing supply in Delhi over the last two years has been fairly low as compared to its counterparts – Gurugram and Noida. This is essentially due to demand-supply mismatch; there is massive demand for affordable housing in the city, while property prices in most pockets of the city have skyrocketed.

Consequently, the pockets that offer affordable or mid-segment projects have been performing relatively better than the expensive ones – such as Greater Kailash II, Panchsheel Park, and South Extension II, to name a few.

In 2018 as well, it is the affordable micro-markets which are driving real estate growth in the city. Besides affordable prices, improved metro connectivity in these areas will also attract prospective home buyers.

Let’s take a closer look at Delhi’s most vibrant affordable housing hotspots:

L-Zone (Dwarka):

Strategically located between Dwarka, Gurugram and IGI airport, L-Zone is among Delhi-NCR’s most preferred property hotspot in 2018. Proposed to be developed as a Smart City, the area will have all modern facilities including solar power stations, rainwater harvesting, and camera surveillance – all very much needs of the hour in Delhi.

In fact, as per ANAROCK data, nearly 2,050 units have been launched in the L-Zone over the past two years, with the maximum supply being in the mid-range segment (Rs. 40 – 80 lakh), followed by the affordable segment (< Rs. 40 lakh). The weighted average price of properties here is Rs. 3,454/sq. ft.

Uttam Nagar:

Located in West Delhi, Uttam Nagar has shown massive real estate growth over the last few years. Affordable property prices have kept the momentum going here, with the current capital values ranging between Rs. 3,150 – 6,050/sq. ft.

The monthly rentals for a 1BHK are as low as Rs. 5,000, thereby luring several existing homeowners to redevelop their old standalone properties and build more floors for good rental returns.

Another factor driving real estate growth here is its easy connectivity to all major areas, including Dwarka, Vikaspuri, and IGI airport via the multi-modal transport system. The combination of affordability and accessibility makes Uttam Nagar a good option for those looking to invest in Delhi-NCR.

Rohini:

Home to two metro stations, Rohini in north-west Delhi continues to be a popular housing destination for end-users and investors alike. The locality boasts of excellent connectivity to other major areas via metro.

Additionally, its proximity to the Bawana Industrial Area has triggered developments along Rohini’s Phases 4 and 5. Capital values range anywhere between Rs. 7,300-12,500/sq. ft., which is far cheaper than several other localities in the vicinity.

Despite traffic and woes, rising pollution level and safety concerns, people still find Delhi to be a favorable place to live in because of the ample job opportunities it offers. However, neighboring Gurugram has not lost its magnetism, either.

Gurugram Real Estate – A Hotspot Check

An on-ground check post recent infrastructure developments like flyovers, underpasses, etc. reveal that quite a few localities in and around the Millennium City are expected to gain real estate momentum.

Significantly, the state government’s move to reduce the circle rates in most localities in 2017 has made it easier for developers to gradually clear their unsold ready-to-move-in stock in Gurugram.

Let’s examine which micro-markets are witnessing maximum activity in 2018:

Sohna:

AKA ‘South Gurugram,’ Sohna has found favor among affordable housing seekers due to its proximity to various office and industrial hubs.

Backed by well-planned infrastructure, Sohna saw the most real estate activity in Gurugram from January 2017 onward, with a fresh housing supply infusion of almost 4,600 units.

Almost 50% of this new supply was in the affordable housing category (< Rs. 40 lakh), followed by an equal mix of mid-segment (Rs. 40-80 lakh) and luxury segment (Rs. 80 lakh – 1.5 cr) flats.

ANAROCK data further reveals that out of the overall supply, close to 2,350 units will be ready for possession in the next couple of years as developers are taking RERA’s stringent penalties with regards to delivery delays quite seriously. The weighted average price of residential properties during this period has been Rs 4,370 per sq. ft.

Sector 65:

Proximity to key office hubs, convenient access to HUDA city metro station and its well-defined social infrastructure qualify Sector 65 as a bona fide Gurugram real estate hotspot in 2018.

Located on Golf Course Extension Road, Sector 65 witnessed the launch of close to 1,600 units from January 2017 till date, with the supply comprising of homes priced between Rs. 6,900 – 10,000/sq. ft.

All the projects in question are fairly large with over 500 units, which means that their final completion can be pegged to within a timeframe of 3 years or more.

Sector 68:

A preferred locality for both office and housing developments, Sector 68 continues to be attractive to developers, end-users, and investors. Sound social infrastructure and good connectivity via the Golf Course Extension Road and NH 248A have added advantages for Sector 68.

ANAROCK data indicates that this micro-market saw the launch of close to 1,500 housing units from January 2017 till date, with their completion pegged at within 2-3 years. With the weighted average price here being Rs. 4,090/sq. ft., its affordability factor makes Sector 68 score quite well over other localities.

With the dust of new policies like RERA and GST finally settling, 2018 is definitely seeing Gurugram’s realty market heading northward.

Among many other factors, the increased economic activity of 2017 and a number of key infrastructure upgrades such as the widening of NH 8, expansion of Sohna Road and rapid metro connectivity have served the city’s realty market well.

As it always is, infrastructure development has been a key market driver for Gurugram and has convincingly vouchsafed its future growth potential.

SOURCE:- Anuj Puri.com