The year 2018 was a veritable rollercoaster ride for Delhi-NCR real estate. Despite signs of recovery, the city’s mounting unsold inventory dragged down overall growth.
With the confusion over the RERA and GST reforms reducing, 2018 ushered in an era of transparency and professionalism in the real estate sector. This should continue in 2019, as well, especially if economic growth shows momentum.
To get a better understanding of the Delhi-NCR real estate market, we spoke to Dhiraj Jain, Director of Mahagun Group. In an exclusive interview with RoofandFloor, he talked about the real estate market in NCR, upcoming localities, and his wishlist for 2019.
Here are the excerpts.
What are your expectations from NCR’s real estate market in 2019?
The year 2018 has been a year of revival for the Indian real estate sector. The prolonged period of sluggishness due to regulatory measures such as demonetisation, RERA, and GST came to an end. It was also reflected in increased sales velocity and office absorption. We expect this to continue in 2019 as well.
In the first two quarters, we expect some consolidation among smaller developers to sell their existing inventory.
By the end of the second quarter, we should be able to see a rise in new launch supply across NCR.
Which areas are expected to see maximum real estate development in the coming year?
High property values and a dense population have made Delhi unaffordable for both homebuyers and investors. Gurgaon was the big option once upon a time, but with rapid development, it has lost its affordability tag. Thus, Noida and its adjacent twin Greater Noida, have come into the reckoning.
Noida enjoys Metro connectivity to Gurgaon and Delhi. A new international airport is in the works in Jewar, which is expected to be finished by 2022.
Additionally, the Aqua Line is scheduled to connect Noida with Greater Noida by early next year. This new line will connect the less accessible areas in Noida and Greater Noida to those of Delhi and Gurgaon. Enhanced connectivity will also bode well for the real estate markets of these two regions.
Further, Siddhartha Vihar in Ghaziabad and the adjoining areas along NH-24 are also expected to see more development in 2019.
What will be the impact of the upcoming general elections on the real estate sector in NCR?
Over the last five years, the current government has announced several reforms and various subsidies for affordable housing. Irrespective of the outcome of the elections, we expect more reforms in the real estate sector and the granting of industry status.
As far as the impact is concerned, it is too early to comment. That being said, we can expect buyers to enter the market after the festival of Makar Sankranti.
What were the preferred property type and BHK configuration in 2018?
In Noida and Greater Noida, buyers were usually looking for 2 and 3BHK apartments. While in Noida Expressway, 3 and 4BHK apartments recorded the maximum demand.
In 2018, Noida property prices hovered in the range of Rs 3,900 – 5,000 per sq. ft. with the availability of good 2BHK apartments at anywhere between Rs 35- 50 Lakh. The price per sq. ft. in Greater Noida continues to be in an affordable band at Rs 3,000 – 4,500.
What about the unsold inventory in NCR?
Due to the boost in the real estate sector, there has been a decrease in unsold inventory in NCR. With stringent norms in place, most developers are focusing on completing their existing projects rather than launching new ones.
At present, the unsold inventory in NCR stands at approximately 200,000 units across different cities in the region. By region, Greater Noida has the maximum share, followed by Gurgaon.
What is your wishlist for the real estate sector in 2019?
• Single-window clearance
• Industry status
• Reduced GST rate
The ongoing 12% GST rate levied on under-construction properties has proved to be a significant deterrent for homebuyers. Thus, a GST rate cut in 2019 could bring in some relief for the Indian homebuyer.