The stretch called New Gurgaon is the closest in terms of proximity to Dwarka and West Delhi once the Dwarka Expressway is operational. Also, the location is close to the international airport. The remainder of the stretch towards Manesar will also see improved connectivity going forward. Land had been acquired at low prices by developers and hence this stretch saw a lot of developments launched in the affordable to mid sized market segment of residential housing. In fact, these areas are now emerging as the answer to the question of what will fill the gap for mid-income housing demand that is not being adequately addressed in Gurgaon.
This stretch provides good, affordable residential options, and a large portion of demand for mid-sized housing in Gurgaon has been diverted to this region. With prices being similar to those for developments in Noida, New Gurgaon has the potential for providing competition to Noida.
The peak of popularity for these areas was during the middle half of 2010. However, as things stand right now, a generic price rise of between 15% and 20% has dampened demand from price-sensitive buyers and project-level sales volumes have dipped. If prices do not move further upwards, this region will lose its advantage of being an affordable residential zone.
The rates were in the range of Rs. 2300-2400/sq ft and have now reached a high of Rs. 3300-3550/sq ft. However, the development of the Dwarka Expressway and other infrastructure initiatives announced by the authorities may bring on further price rises in the future.
As of now, new projects being launched at the higher price levels are unable to achieve appreciable sales figures. It is obvious that the consumer for this location is extremely price sensitive. Going by the huge demand for homes in New Gurgaon less than a year ago, it is obvious that this region will only regain actual residential property absorption at price points which are at least 20-25% lower than current levels. There is a clear signal here for the developers involved.
All said and done, this area has good potential as a future residential hub. Also, the number of projects that have been announced clearly indicates that developers consider this area as one for the future. We consider New Gurgaon to be of high importance to homebuyers as well as long-term investors. That said, it is the pace of construction in launched projects and the quality of construction that will determine the future skyline of this area.
The author, Santhosh Kumar, is CEO-Operations, Jones Lang LaSalle India
