By: Prameet Narula
Track2Realty Exclusive: While in many other property markets across the country the developers are planning freebies & discounts to attract the buyers, in Gurgaon the demand and supply cycle of the property market is showing a different trend altogether. With very few inventory hangover of ready-to-move stocks available and the macro-economic outlook reviving, the buyers are back in the market and even though a price rise is on the cards the festive spirit is yet driving the home buyers to the market.
This is probably the only market in the North India where the boundaries of the city are increasingly being stretched to the new growth corridors and still there are many takers. It is hence expected that the festive season would be the real turnaround time for Gurgaon real estate and the transaction would be much higher than the last few years when the macro-economic outlook was bearish and the overall sentiments played the dampener for the property market in general and the housing market in particular.
There has actually been a turnaround in the macro-economic outlook in the last one quarter and what it has actually done is that it has changed the buyers’ psyche vis-à-vis their investment in general and property market in particular. This optimism has also removed the apprehension of any price correction or crash from buyers’ psyche.
It is hence no surprise to the market watchers that the buyers are looking forward to take a plunge in the property market this festive season. And it is not sheer sentiments; rather the buyers have their rational reasons. They are now anticipating triple comfort – job security, low interest and inflation in control – that could make their home purchase easier. They have been watching the property market on the sidelines for long and feel that the time has come to invest as the market is evenly balanced for both the developers as well as the buyers now. It may not be the same in time to come once the actual change in the economic outlook is on ground with statistics.
Niharika Arora, a banking professional in the city has zeroed in on a property on Sohna Road. Not very religious otherwise, she still thinks for the biggest investment of her life festive spirit and the importance of muhurats does matter. Even at a rational level, her cost & benefit analysis makes her feel this is probably the best time in the last 3-4 years and the market is poised to see property prices appreciate in the next two to three quarters when the expected growth figure will be released. She feels as of now, the marginal price appreciation on the eve of festivals in the market is based on that optimism.
“In terms of demand and supply cycle property market of Gurgaon will always be under-supplied as the city is a magnet to the business houses and multinational companies. A price appreciation on the eve of the festivals is hence a logical conclusion when the macro-economic sentiments have improved. Among our peer group we have the feeling of job security now with the recovery in Indian economy and business transactions going up. Moreover, interest rates now onwards are poised to go down and the RBI has already indicated that inflation is on course of being tamed. Collectively, this makes the home purchase ideal now as I may end up paying more for the same property next year,” says Niharika.
The developers in the city also believe that the market is best positioned for the average home buyers on the eve of the festivals. Sanjey Roy, DLF spokesperson agrees that it is rather interesting that the marginal price appreciation that should have ideally dampened the spirit of the home buyers has actually revived the sentiments. The home buyers have carried home the point that all the doom and gloom over the property market is over and the marginal appreciation indicates the prices will not correct or crash, as prophets of dooms day forecasted for long. It means not only the value for money now but expected appreciation ahead as well.
“I agree the buyers coming back in the Gurgaon market is sentiment driven at the moment. But sentiment alone can not be credited for the gradual recovery of the city property market. The buyers are well informed today as far as the state of economy and the dynamics of property market are concerned. They are also aware that if they miss the house buying now, the prices are very much expected to go up in short to medium term outlook. I feel it is a combination of emotional and rational urge that is behind the buyers’ optimism on the eve of the festivals,” says Roy.
Geetambar Anand, CMD of ATS Group says in residential property investment, the customers focus on the properties that have potential for assured rental yields and capital appreciation. This includes the residential projects which are close to their workplace catchments, industrial hubs and locations with high aspirational value. In the coming season, project-specific price increase can be expected across these sub-markets – this pertains specifically to projects that are being delivered or are nearing completion. The mid-end and affordable housing segments will record healthy appreciation in capital values in the short term from a low base.
“As demand is expected to improve with the softening of the interest rates, improving sales will benefit developers; who should focus on execution of their on-going project portfolios. On the whole, the market sentiments augur well for the residential and the commercial property markets, more or less assuring relatively healthy absorption of residential and commercial spaces in the times to come. The new infrastructure initiatives planned to be undertaken by the State Government will also play the crucial role in ascent of Gurgaon property market,” says Anand.
Analysts tracking the market in this part of the world maintain that the numero uno positioning of the Gurgaon property market can not be denied. In the last few years, Gurgaon has witnessed a substantially higher percentage growth in the capital values due to the extensive commercial activity for the retail & office spaces being leased and purchased. The increased development of the commercial belt resulted in a concurrent demand for quality residential space in these as well as the neighbouring areas.
Prices on the southern peripheral road connecting to National Highway 8 have seen considerable appreciation over the past few months. For customers, this location holds good investment potential thanks to the enhanced connectivity that NH8 provides to Manesar and Dwarka. In particular, the residential properties along the Dwarka Expressway have also attracted the smart considerations from the mid-income to expats as a buyer group. It is hence very much expected that the buyers’ enquiry will convert into sales this festive season despite of a marginal price rise.
