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Residential Market Is Expected To Remain Upbeat |
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Constrained supply has led to a steep rise in rentals, ranging from 30% to 80%, in the last one year in central and south Delhi. However, in suburbs like Mayur Vihar, Patparganj and Rohini, huge supply of fresh apartments in the adjoining areas like Noida, Indirapuram and Gurgaon, have restricted this trend with rentals here rising by around 10% only.
In the light of this, a senior property consultant, while welcoming the decision of the Maharashtra government to scrap the law that controls land holdings feels that in Delhi, too, the government should take similar measures. He says the government should develop infrastructure, so that the number of residential units in south and central Delhi could be increased without affecting the quality of life. He is all for the government permitting vertical growth of the city to accommodate more people.
The increasing demand, coupled with limited supply in south and central Delhi, expected over next 1-2 years indicates a further potential for increase in rental values during this period, said global real estate consultancy firm CB Richard Ellis in a report. However, as per the proposed master plan for Delhi (perspective year 2021), the supply in the central and south Delhi localities is expected to increase due to relaxation of built-up area norms in some of these localities. This might result in short term softening of rentals subsequently, said the report.
However, at present, in suburbs of Delhi, demand-supply is going neck and neck. Even though more and more office space is coming up in Gurgaon, Noida and Greater Noida, demand is going to outstrip the supply in the medium term.
The Delhi property market has been witnessing a continuous upward trend over the last four to five years, in line with the situation of property markets across India. The surge in the economic growth in the country has created huge wealth in the upper segment of the society. And, the number of millionaires is at an unprecedented high, particularly over the last couple of years. This has created a huge demand in the premium-segment residential accommodations.
RESIDENTIAL MARKET CONDITIONS
The residential sector in Delhi has witnessed a significant upsurge in activity over the last couple of years. According to CBRE, the rental values have witnessed a growth to the tune of 70%-90% over last two years for some prime residential micro-markets of Delhi and the suburbs. With demand in the upswing and limited supply conditions within prime residential localities, the residential market is expected to remain upbeat in the short to medium term, the CBRE report said.
The prime residential micro-markets in Delhi comprise up-market localities of central and south Delhi (Chanakya Puri, Shanti Niketan, Golf Links, Jor Bagh, Prithviraj Road, Aurangzeb Road, Amrita Shergil Marg, Vasant Vihar, Anand Niketan) and are patronized by expatriates, corporates, high net worth individuals and foreign consulates.
Proximity to the CBD (Central Business District), better physical infrastructure, presence of social infrastructure facilities and vast stretches of greenery are some of the distinct advantages of these localities. Supply in these localities mostly comprises of low-rise private bungalows and builder apartments. The typical plot sizes vary between 250 sq yds to 1,200 sq yds, except in Prithviraj Road, Aurangzeb Road and Amrita Shergil Marg where plot sizes range from 1/2 to 1 acre.
Some of these localities fall in the Lutyens’ Bungalow Zone (LBZ) where all new construction activity is prohibited. Owing to the limited scope for expansion of supply or re-densification, these localities have been able to retain their exclusive nature and command higher values as compared to other residential areas of Delhi. But as the construction activities are going in full swing in the peripheral area like Noida, Vaishali, Indirapuram, Ghaziabad, Greater Noida, Gurgaon, Manesar and Faridabad, which typically cater to the middle class people, the rentals in the suburbs like Mayur Vihar, Patparganj, Pitampura, Rohini, Vikaspuri and Dwarka have gone up by around 20% in the last one year.
According to sources, rentals in these areas in the last couple of years have gone up by around 40% to 50%. Interestingly, capital value of apartments in the suburbs have gone up by 200% to 300% in the last four years. In fact, a broker says demand-supply situation has not changed much in the last two years, and that increase in rentals is mainly due to rise in the capital value. ...... |
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