Uptick in new houses prices
By Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
The Millennium City of Gurugram has a very prominent place on India’s residential real estate map and is considered a bellwether of the state of the market for National Capital Region (NCR).
If we study what happened in the city’s housing market in the first quarter of 2018 against the same period in 2017, some interesting changes emerge.
Q1 2018 – The weighted average price for housing properties launched between January to May in 2018 is INR 4580/sft.
Q1 2017 – The weighted average price for housing properties launched between January to May in 2017 was INR 4,300/sft.
In other words, we are seeing an uptick in pricing for newly-launched housing projects in Gurugram, in line with the returning end-user demand as a result of improving market transparency.
In Q1 2018, approximately 4,100 new units have been launched in Gurugram, accounting for nearly 32% of the total stock in entire NCR.
Interestingly, out of the total stock launched in Gurgaon during this period, nearly 37% consisted of units in the affordable category (<INR 40 lakh), followed by 33% in the luxury segment (INR 80 lakh – 1.5 Cr) and 28% in the ultra-luxury category (>INR 1.5 Cr). The mid-income housing segment saw very few new launches in 2018.
In Q1 2017, approximately 5,600 new units were launched in Gurugram, accounting for nearly 43% of NCR’s total stock. Out of the total stock launched in this period, a whopping 83% comprised of units in the affordable category (<INR 40 lakh), followed by 16% in the mid segment (INR 40 – 80 lakh). The luxury and ultra-luxury categories saw minimal launches during the period.
While the new launch units in Gurugram have declined in 2018 as against 2017, particularly because builders are focusing on completing their previously launched projects, it is interesting to note that the new supply in the luxury and ultra-luxury segments have seen a major uptick this year on the back of renewed buyer confidence. The government’s focus on affordable housing had somewhat taken the sheen off other segments (luxury and ultra-luxury) in the previous years.
In Q1 2018, out of the total unsold housing stock in NCR (approximately 2,00400 units), nearly 26% were unsold in Gurugram.
In Q1 2017, out of the total unsold stock in NCR (approximately 2,15,000 units), nearly 24% were unsold in Gurugram.
The burden of unsold housing in entire NCR is quite evidently reducing, although absorption in Gurgaon was marginally faster last year.
Commercial Real Estate
Gurgaon is a prominent commercial office market of Delhi-NCR as well as India, and the dynamics of its commercial office market in Q1 2018 as against the same period last year are worth noting. The data indicates that the city is holding its own on the commercial office front.
In Q1 2018, the city saw significant demand from IT-BPM as well as manufacturing and engineering companies. In this period, there were 68 million sq. ft. of good quality office stock in Gurugram’s CBD and other areas. While the CBD has a limited vacancy of 2-3%, there is a vacancy rate of 35-37% in other areas. The CBD areas ofGurugram command rentals of INR 118-122/sq.ft./month, which is lower than CBDs of many other cities. However, in other areas of Gurugram, one can lease an office property at INR 65-70/sq.ft./month.
In Q1 2017, Gurugram’s commercial office sector witnessed significant absorption from BFSI, engineering and manufacturing companies. In this period, the city had around 66 million sq. ft. of good quality stock altogether in its CBD and other areas.
The vacancy in CBD areas was around 5-6%, while in other areas it was around 35-40%. Gurugram’s CBD areas commanded rentals of INR 118-120/sq.ft./month, while other areas of the city saw office rentals at INR 68-70/sq.ft./month.
With improving business conditions and rising ease of doing business, global companies are now flocking back to India and Gurugram is a priority destination for many of them.
While lease rentals in the CBD and non-CBD areas have not changed significantly over the last one year, the vacancies have dropped marginally – largely on the back of rising demand. fiinews.com