Delhi NCR Residential Property Pricing – Festive Season Update..

by Mr. Santhosh Kumar, Jones Lang LaSalle India

Over the past two quarters, the residential property market in South Delhi has shown only marginal appreciation in capital values & rentals. This could have more to do with the recent upward revision in circle rates in various zones than anything else.

Supply & demand dynamics in South Delhi have been more or less constant, and the revision in circle rates has resulted in larger cheque amounts and lower potential for offloading cash in real estate transactions. This has, in fact, acted as a check on the anticipated price appreciation in South Delhi.

South Delhi residential markets such as Saket, GK1, GK 2, Green Park and Hauz Khas have not shown much price fluctuations over the past two years.

 

Santhosh Kumar,
JLL India

The average pricing seen in Q1 2011 does not differ visibly from the current averages.

Currently, residential property prices in South Delhi are in the range of Rs. 24,000 to 32, 000 per square feet.

In Gurgaon, almost all major micro-markets have witnessed significant variations over the 2011 levels.

Super-luxury residential real estate prices have definitely corrected, currently being in the range of Rs. 23,000 to Rs. 28.000 per square feet. as compared to the Rs. 30,000 to Rs. 35,000 per square feet. range 2 years back. Premium / luxury projects in Gurgaon are currently priced between Rs. 12,000 to Rs. 17,000 per square feet.

On Golf Course Road, normal apartments are currently priced in the range of Rs. 12,000 to  Rs. 16,000 per square feet. as compared to the price range of Rs. 8,000 to 9,000 per square feet. 2 years ago. On MG Road, the current prices for residential apartments range from Rs. 10,000 to12,000 per square feet. as against an average of Rs. 8,000-9,000 per square feet. in 2011.

Residential apartments on Golf Course Extension, which has a huge upcoming supply, are currently priced in the range of Rs. 8,000 to 13,000 per square feet., while the corresponding figures 2 years back were Rs. 6,000-9,00 per square feet. The current prices for apartments on Sohna Road range from Rs. 9,000 to 9,500 per square feet., while the prices for comparable properties in same location at beginning of 2011 were in the range of Rs. 7,000 to 7,500 per square feet.

Apart from the traditional high-demand residential micro-markets, other locations that are emerging as promising destinations are the Southern Periphery & Dwarka Expressway.

Today, the Southern Periphery has properties priced in the range of Rs. 6,000 to 7,000 per square feet. as against the price levels of Rs. 4,500-5,500 per square feet. a couple of years back.

Prices for properties on Dwarka Expressway are currently selling at rates ranging from Rs. 6,000 to  Rs. 8,000 per square feet. – this represents an appreciation of over 50 % over the corresponding 2011 levels.

The Gurgaon residential property market has currently stabilized, and there is no scope for any significant appreciation in the near term. Gurgaon has transformed to being an end-user driven market from an investor-driven market  - short-term speculators on the lookout for immediate capital gains have ceased to exist in this market.

On the other hand, the Southern Periphery essentially remains a hotbed as at the current price points, as it has the highest magnitude of affordable options.

The proposed widening of Golf Course Road, the construction of the underpass and the proposed expressway will boost connectivity is further going to improve significantly. This will help improve sales to some extent.

Developers in the NCR region have been hit adversely due to the drop in residential prices at a time when they are running high inventory levels. Residential sales have picked up only marginally over the last 3 quarters.

Against this backdrop, boosting sales in the top-most priority for developers, who will use all means to cash in on the festive season.

In this period, buyers can expect serious incentives and discounts. If the various offers currently being put out on the market do not elicit the required response, developers will be forced to reconsider their pricing.

About the author..

Mr. Santhosh Kumar is CEO (Operations) atJones Lang LaSalle India

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