Sprawling business hubs
A number of factors are boosting prospects for the real estate sector in NCR
Published: Fri 26 Jan 2018, 2:28 PM
Driving down from Delhi to Gurgaon, Noida or Greater Noida gives one the sense of being in the heart of one of India's most vibrant commercial, residential and infrastructure hubs.
While a growing number of commuters are taking to the new metro lines that link these distant satellite cities, workers can be seen busy at construction sites for office complexes, residential projects and major infrastructure facilities.
Real estate developers in the National Capital Region (NCR), which includes Delhi, Gurgaon, Noida, Greater Noida and several other satellite cities, are heaving a sigh of relief as they expect a long-awaited turnaround in the fortunes of the sector.
The past few years have seen a constant decline in prices of properties and 2017 was also equally bad with growing inventories of unsold housing units.
But many industry experts believe that 2018 will be a crucial year, when the sector, which had bottomed in the previous year, would see a revival. Cities like Gurgaon have already started witnessing a revival and sources in the real estate trade believe that there could be a turnaround in the fortunes of the industry later this year.
Already, the commercial realty market in the NCR started picking up in 2017, with more than six million square feet of space being leased out in recent months.
Demand from the IT and ITeS sectors have once again revived in Gurgaon and Noida and even sectors including Udyog Vihar, Cyber City and localities along the NH-8 are expected to witness a revival in demand, say analysts.
One reason for the slowdown last year was the introduction of GST, RERA and the Benami Transactions Prohibition Act, which resulted in uneasiness in the markets. But with the landmark legislations in place and businesses having adapted to the new realities, it is expected that even real estate players will get used to the new rules.
The NCR - the sprawling, 60,000 square kilometres business and residential hub spread across the capital, its surrounding satellite towns and also spilling into states such as Haryana, Uttar Pradesh and Rajasthan - remains the hub of activities in India thanks to the enormous investments being made by companies, both domestic and multinational.
Both central and state governments are also pouring in funds into the infrastructure in the NCR, developing new metro rail projects, new highways (or widening existing ones), setting up bus and rail terminals, and even a proposed new international airport (at Greater Noida).
Gurgaon, which has grown haphazardly and at a frenetic pace in the past, is finally getting the funds to develop its infrastructure. While the painful tollbooths on the Delhi-Gurgaon border have been dismantled - ensuring smoother flow of traffic - many believe that the opening of about half a dozen underpasses and flyovers along the national highway will ease traffic conditions.
The National Highway Authority of India (NHAI) had recently opened several flyovers and underpasses at the Hero Honda chowk, the Rajiv chowk, the MDI chowk, the Signature Tower and Iffco chowk.
Besides easing traffic conditions on the Delhi-Gurgaon route, it will also open up other areas in Gurgaon, boosting the prospects for the real estate sector. Many real estate developers believe that the opening of new flyovers, underpasses and link roads will revive the sector in Gurgaon.
Industry sources believe that the new initiatives taken by the Haryana government, including implementing its affordable housing policy - which encourages developers to take up projects in the Rs5 million bracket - will boost the sector in 2018.
A report by Knight Frank, an international consultancy, notes that "affordable housing has been a major contributor to the new launches in NCR in 2017 indicating a move towards affordable options for homebuyers in the region. The share of affordable housing has gone up significantly from 47 per cent in 2016 to a steep 79 per cent in 2017."
In the second half of 2017, Gurgaon accounted for more than half the new launches in the NCR.
The significant improvement in the transport network - especially the construction of new metro lines - is expected to boost the property sector in several parts of the NCR including Gurgaon, Noida and Greater Noida.
According to estimates, residential townships near the sprawling business hubs of Gurgaon and Noida are emerging as significant movers of the real estate sector in the country.