99acres Insite is a quarterly report which captures the capital and rental price trends of the residential realty market across seven major cities of India. According to the report, property prices per sq ft in Delhi NCR witnessed a minimal downtrend of 1% in Jul-Sep 2016, as compared to Apr-Jun 2016. The rental market improved by 2% in the last one year.
Narasimha Jayakumar, Chief Business Officer, 99acres, said, “The bottomed up capital prices, attractive schemes by developers and rate cuts by RBI foretell a progressive story for Delhi NCR’s realty landscape in the forthcoming quarters. Although active transactions were limited despite improvement in enquiries, the capital graph is anticipated to become steady as end-users and investors return to the market. The rental scenario of Delhi NCR strengthened YoY with transactions witnessing a marked improvement, especially in the micro-markets of Noida and Gurgaon.
An upswing in office space absorption and governmental endeavours to enhance infrastructure keep hopes for a brighter future alive.”
Price Trend Analysis of Delhi (Jul-Sep 2016 vs. Apr-Jun 2016):
North, South East, West and Dwarka
While several policy reforms and infrastructural improvements in Delhi revived buyer sentiment, unsold stock and delayed project deliveries put capital rates under immense pressure. Housing prices in the city descended unrelentingly for the third consecutive quarter in Jul-Sep 2016.
North Delhi was the only zone which posted a growth, albeit insignificant, in Jul-Sep 2016, as compared to Apr-Jun 2016. Dwarka, East Delhi and South Delhi witnessed a drop of 1%-2% in property prices, while values in the western zone plateaued.
The enduring popularity of builder floors in Delhi ensured a steady market for this property type, with Dwarka and West Delhi clocking an average increase of 2% in capital values.
Despite average values of builder floors in South Delhi remaining unchanged QoQ, nearly 50% of the tracked localities recorded growth. In fact, builder floors in Malviya Nagar, Lajpat Nagar III and South Extension I boasted of an average increase of 5% in capital price tags QoQ.
Noida and Greater Noida
The real estate story of Noida and Greater Noida remained fraught with the highest inventory overhang in the country, risk-averse investors and wary homebuyers. Not surprisingly, average apartment values inched down QoQ.
Though enquiries posted slight improvement against the previous quarter, deals remained modest. Infrastructure enhancements such as the ongoing work on Noida-Greater Noida metro line could do little to cheer buyer sentiment in the twin cities.
Despite a spike of 14.19% in residential allotment rates in Noida as reported by Noida Board, the average value of plots did not see any growth in Jul-Sep 2016, vis-à-vis Apr-Jun 2016. Only 17% of the total number of tracked localities featuring residential plots reported an increase in capital prices over the last two quarters.
Sector 116, Noida, emerged as the frontrunner with a 7% surge is plot rates, despite inadequate road infra. The announcement of Samajwadi Affordable Housing Yojna and Noida Authority’s assurance to complete the pending 300 m road buoyed sentiments.
Ghaziabad’s landscape mirrored the overall bleak realty scenario of Delhi NCR. The rise in the number of enquiries failed to bolster the city’s realty fortunes, which saw prices descending marginally, in Jul-Sep 2016, as compared to the preceding quarter.
The micro-markets of Sahibabad, Shastri Nagar, Bhopura, Mohan Nagar and Kaushambi beat the slowdown blues with 1%-7% rise in the values of residential apartments QoQ.
Average prices of builder floors in Ghaziabad dropped nominally in Jul-Sep 2016, after witnessing a stagnant market in the quarter ending June 2016.
Ankur Vihar and Surya Nagar emerged as the top grossers, each witnessing a capital rise of 2%. While the appreciation in Ankur Vihar can be attributed to an artificial increase in ‘ask’ prices, growth in Surya Nagar is a resultant of a hike in circle rates.
The mounting capital graph of land parcels in Ghaziabad exhibited the popularity of residential plots over apartments and builder floors. This property type reported an uptrend of 2% in Jul-Sep 2016, after seeing an appreciation of 5% in Apr-Jun 2016.
Values in residential hubs across NH 58 and NH 91 rose by 4%-5%, QoQ, in anticipation to infrastructure development aimed at reducing traffic gluts.
Gurgaon, Faridabad, Dharuhera, Bhiwadi
· Home prices in Gurgaon continued to remain under pressure despite governmental endeavour towards bettering infrastructure and improving connectivity and plans of establishing a Gurgaon Development Authority.
· Average weighted prices fell by 2% in Faridabad in Jul-Sep 2016. Merely 12% of the tracked localities in the city depicted growth during the quarter.
· Capital values of builder floors in Gurgaon continued its downward trajectory, witnessing a dip of two percent, in the September ending quarter of 2016. Despite healthy office space absorption in the city, the receding number of homebuyers and the popularity of society apartments could be the contributory factors.
When compared to the demand for apartments, Faridabad reported a livelier market for builder floors. Prices for this property type remained stable in Jul-Sep 2016, vis-à-vis Apr-Jun 2016.
· Subsequent to a flat market in Apr-Jun 2016, Gurgaon posted a decline in average capital values of residential plots in Jul-Sep 2016. Around 70% of the tracked localities clocked a dip in prices, while 20% recorded a stagnant market.
· Price of land parcels in Faridabad slipped marginally in Jul-Sep 2016, vis-à-vis Apr-Jun 2016, although BPTP and sector 65 performed well on the capital charts. Possession of 9,000 units in BPTP in the quarter ending June worked in favour of the locale’s realty.
Rental Analysis of Delhi (Jul-Sep 2016 vs. Jul-Sep 2015):
North, South East, West and Dwarka
Delhi’s lacklustre capital market did not rub off its influence on the rental landscape, certain zones of which continued to remain cheerful. Dwarka, North and West Delhi clocked a median rental rise of 3% in Jul-Sep 2016, vis-à-vis 2015.
Dwarka held the baton of flourishing rental charts, housing all the top performing localities. Rents of apartments in sectors 5, 7, 10, 11 and 19 recorded a rise of 8%, each, YoY, on the back of the Dwarka Expressway and the area’s comparative affordability to Gurgaon.
Rental ‘asks’ in East and South Delhi slipped by 3%-4%, YoY. However, Vasundhra Enclave and Mayur Vihar I in East Delhi reported a robust market with a yearly growth of 2%-3%, driven by a high liveability index and strong social infrastructure.
The average rental rates for builder floors in Delhi did not record any growth YoY despite their popularity among the price-conscious tenant community. Ample supply and increasing preference for society apartments kept growth under pressure.
At a zonal level, Dwarka, East Delhi and North Delhi witnessed rental values of builder floors escalating by 1%-4% YoY.
Rents in the upmarket areas of Greater Kailash II and Lajpat Nagar soared by 6%-10% in the last one year on account of recent infrastructural overhauls.
Dwarka’s rental landscape flourished due to the infrastructural enhancements on the radar, recording a growth of 4%, YoY.
Noida and Greater Noida
Greater Noida exemplified the bright side of NCR’s rental landscape, with a sudden surge of 6% in Jul-Sep 2016, vis-à-vis the corresponding quarter in 2015. Furthermore, almost 70% of the tracked localities delineated an uptrend YoY.
In stark contrast to Greater Noida, average rental rates in Noida shrunk by 2% YoY. However, the expanding metro network and improving physical infrastructure between the cities hold the promise of redefining the rental scenario.
Pari Chowk continued to hold the baton of progress with a whopping increase of 15% in rents of apartments, thanks to the upcoming metro project.