The real estate sector is going through a significant shift as technology continues to grow at an unheard-of rate. Technology is transforming how we purchase, sell, and manage real estate, from virtual home tours to blockchain-based property transactions.

Virtual and augmented reality (VR and AR) utilization is one of the most significant ways technology is influencing the market. With the aid of these technologies, prospective buyers may virtually tour homes and even alter the décor and layout in real time. In addition to saving time and money on travel, this enables buyers to get a better idea of what a property would look like before paying a physical visit.

The application of machine learning and artificial intelligence (AI) is another way that technology is changing the sector. These tools can examine vast amounts of data to spot patterns and forecast future market circumstances. This can assist real estate professionals in making better-informed choices regarding the purchase, sale, and investment of real estate.

Blockchain technology is also being utilized to simplify real estate transactions and improve transparency. With blockchain, the danger of fraud and mistakes throughout the purchasing and selling process can be reduced because property ownership can be documented and monitored in a safe and tamper-proof digital ledger.

The ability to remotely operate and monitor a home from a smartphone is another benefit of the growing popularity of smart home technologies. Everything from voice-activated assistants and energy-efficient appliances to smart thermostats and security systems can be categorized under this technology. Future trends are anticipated to see an increase in the use of smart home technologies as more buyers place a higher priority on sustainability and energy efficiency.

In general, technology is transforming the real estate sector, making it more accessible, transparent, and efficient than ever. We may anticipate many more changes in the way we purchase, sell, and manage real estate as these technologies advance and expand.

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The real estate industry in India is flourishing, and there are many options accessible for people who want to buy or sell property. Online portals have gained popularity as a means of conducting real estate transactions as the real estate sector becomes more and more digitized. We’ll look at some of the top Indian real estate portals and websites for buying and selling property in this article.

1.) Magicbricks: One of the top online real estate marketplaces in India. It was introduced in 2006, and the Times Group owns it. The website offers a wide range of services for buying, selling, and renting real estate, including verified listings, virtual tours of the homes, and help with the necessary paperwork. Magicbricks is an all-inclusive website for anyone trying to purchase or sell property in India because it also provides features like property price trends, localities’ insights, and user reviews.

2.) 99acres: 99acres is a different well-known real estate marketplace in India that provides a variety of services for buyers and sellers of real estate. The platform was introduced in 2005, and Info Edge, the business behind Naukri.com, owns it. Users of 99acres can access verified listings, virtual tours of properties, and price trend analyses for different areas. The platform serves as a one-stop shop for all property-related issues by providing a variety of services like home loans, property appraisal, and legal advice.

3.) Housing.com: Housing.com is a well-known real estate website that employs technology to make buying and selling real estate easier. PropTiger.com, which launched the platform in 2012, is the platform’s owner. A number of services are available through Housing.com, such as verified listings, virtual tours of properties, and help with paperwork. Additionally, the platform features a special function dubbed “Slice View,” which gives consumers a 360-degree view of the inside of the property. Housing.com is a great resource for Indian buyers and sellers of real estate because it also offers users information on neighbourhood trends and real estate price indices.

4.) CommonFloor: Quikr is the owner of CommonFloor, a real estate platform that was introduced in 2007. Users can get verified listings, virtual tours of properties, and help with documents through the platform. Along with a variety of other services, CommonFloor also provides legal counsel and housing loans. The platform features a distinctive feature called “Community Living,” which gives customers knowledge about the neighbourhood, including specifics about the area’s schools, hospitals, and services. Additionally, CommonFloor provides a mobile app that makes it simple for users to browse the website while on the go.

5.) PropTiger: Elara Technologies is the owner of PropTiger, a real estate platform that was first introduced in 2011. Users can get verified listings, virtual tours of properties, and help with documents through the platform. Additional services provided by PropTiger include home loans, property appraisals, and legal support. The website features a distinctive feature dubbed “Real Insight,” which gives customers data-driven insights into the real estate market. Additionally, PropTiger has a mobile app that makes it simple for consumers to browse the website while on the go.

These are some of the top websites/portals for buying and selling real estate in India. Every platform has a different collection of features and services, therefore it’s critical to compare them all according to your own requirements. Online portals provide a convenient and hassle-free approach to buy or sell property in India, regardless of the platform you select.

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Despite the arrival of Coronavirus, the economy is still the first choice for real estate investment. According to a report jointly released by Housing.com and the National Real Estate Development Council (NAREDCO) Concerned YET POSITIVE – The Indian Real Estate Consumer (April – May 2020), real estate still remains the preferred method of investment. is. This is accepted by 35 percent people. This was followed by gold (28%); Fixed deposits (22%) rank among stocks (16%).

Housing.com’s survey was conducted in April and May 2020, at which time the Indian economy was under lockdown. More than 3,000 potential homebuyers were included in the process through random sampling techniques to enable the survey to be conducted in an unbiased manner.

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India Ratings and Research said in their reports that the home buyers will be benefited that are awaiting possession of their homes, by the India government’s decision to set up a Rs 25,000 crores fund to provide a priority for debt financing to complete stalled housing projects. The Fund would provide an alternative outlet to net-worth-positive projects stalled because of liquidity/credit availability issues. Many non-banking financial firms and housing financing companies will benefit from reviving viable projects listed as non-performing assets (NPAs).

Nevertheless, the imbalance in demand-supply is likely to worsen with stalled projects on the move, and pricing pressures in the sector may become more pronounced if overall housing demand is not recovering. In addition, the market expansion for Grade I players could also continue as supply from non-Grade I players are being made available. Under India Ratings and Research (Fitch Group) classification, Grade I developers are the one who has a reputed brand name, significant market shares, solid executive skills, solid financial flexibility and regulatory compliance with strong balance sheets.

Modification in eligibility criteria to support distressed projects.

The latest guidelines also expanded the scope of projects under this special window which can benefit from the funding. It will include housing units of up to Rs 2 crores (Mumbai – Rs 2 crores; other 7 cities – Rs 1.5 crores; and the rest of the cities – Rs 1 crore) and projects graded as NPA or are subject to NCLT (National Company Law Tribunal) proceedings with a net worth positive (cash flows greater than the project cost). In comparison to the previous announcement in September 2019, which only limited funding to non-NPA and non-NCLT projects, the new measure will support fundamentally viable yet struggling projects due to slow sales and/or the lack of availability of credit.

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Anuj Puri, Chairman – ANAROCK Property Consultants

• Miracles have been known to happen when a chequebook lies on the negotiation table

Stamp Duty Shocker

On the real estate market, upward revisions of any kind can doubtlessly hurt. Let’s take the Maharashtra Government’s proposal to levy a surcharge of 1% on stamp duty, effectively raising it to 6% from the existing 5%. Such news, especially at a time when MMR’s real estate market was beginning to show some green shoots of revival with sales and new supply numbers rising, come as a shock.

This is a significant increase in the cost of real estate purchase that will hamper consumer sentiment – especially in the affordable housing segment. On the one hand, the  Government has rolled out multiple sops to boost affordable housing – and on the other, it is increasing the cost of properties. One can only hope that at least affordable housing is saved from this surcharge.

This is real and painful, and the impact is very hard to mitigate. That said, developers do have the option of absorbing this additional cost for serious buyers. We have seen the same dynamic playing out with the other factor which is traditionally assumed to impact housing demand – housing loan interest rates.

Upward revisions in interest rates are regularly bemoaned by the industry. However, if we consider the core reality, consumers are not as seriously affected by hardening interest rates as developers (who have been known to absorb the impact of increased home loan rates to catalyze sales).

How ‘real’ is the impact?

For all practical purposes, the home loan is the driving force behind the Indian residential real estate market. Without a home loan, a large portion of the Indian population would be forced to live in rental houses. Because of this facility, one can be a proud homeowner without having to have enormous amounts of ready cash.

Of course, some would say that the ideal way is to buy a property outright. However, given the high cost of property, home loans are really the only way out. While the borrower certainly needs to contribute a component of the property’s cost himself, he can realistically raise this via personal resources such as family or personal savings.

Movement of Repo Rates, which impact home loan interest rates

Due to the central role they play in sustaining the real estate market, it is not just home buyers who depend on home loans, but developers as well. Both sides will bemoan the announcement of even a marginal hike in interest rates, stating that it will seriously affect demand for homes. Both will laud a minuscule reduction while simultaneously stating that it is not enough and more was expected.

The common understanding is that when home loan interest rates rise, potential buyers have less disposable income to buy property with and will defer intended property purchases even further. This is disturbing since the current environment indicates that there will in all probability be further interest rate hikes and this would impact the demand for residential property.

Let’s examine what this impact at the level of different budget segments, rather than at an overall market level.

• Impact on LIG homebuyers: Technically, the buyer segment that is hit hardest by increasing interest rates is the bottom part of the pyramid – daily wage earners and people on very low monthly incomes who do not yet own a home and seriously want to. In an environment of increasing interest rates, it would logically be this segment that becomes averse to buying a home. However, in line with the Government of India’s ‘Housing for All’ vision, first-time home buyers in the affordable housing segment have been incentivized with special interest rate rebates and a number of other measures. Therefore, they still have a lot of good reason to go in for home ownership.
• Impact on HNI homebuyers: HNIs, who represent the top part of the pyramid, are less affected by home loan interest rates. They are focused on luxury housing, and many of them have the financial wherewithal to buy the properties they want outright and without a home loan. Even if they do use a home loan, minor variations in interest rates do not play a significant role in their purchase decisions.
• Impact on MIG homebuyers: This leaves the middle class, which is technically vulnerable to rising interest rates. Most middle-class Indians walk a tightrope of financial balancing wherein they have a number of equally important financial obligations to meet. While owning a home may be high on their priority list, they also need to reserve funds for their children’s education, paying their rent, investing for retirement, and so on. Then again, there are many strata even within the Indian middle class, so the ‘upper middle class’ has fewer financial challenges than the ‘lower middle class’.

Minor upward revisions in home loan interest rates may not deter the upper middle class from a home purchase, while they can certainly give pause to a lower-middle-class family’s plans. However, middle-class first-time home buyers do have recourse in the interest rate incentives that the Government has unleashed for their benefit, as long as the properties they buy fall within certain size and budget parameters.

Looking beyond the hype

Simultaneously, increasing interest rates also means that profits on fixed deposits and some other investment instruments increase. Also, when interest rates increase, developers – ever sensitive to sentiment – have invariably sought to offset the perceived impact by either reducing their prices, trotting out more lucrative offers and freebies, and generally becoming more open to serious negotiation.

In fact, this tendency has become a more or less permanent fixture ever since a lot of factors (other than interest rates) began impacting sales. Moreover, borrowers with a good credit repayment history can negotiate with a bank for a better home loan interest rate.

There is also the fact that there can be an additional tax benefit if the property is in a joint ownership. Like men, women homebuyers are also eligible for a tax exemption up to Rs.1.5 lakh under Section 80C on the principal paid on a housing loan, and up to Rs. 2 lakh under Section 24 per year on the interest on a home loan. If a property is rented out, then the entire interest on the home loan is allowed as a deduction.

To avail this additional tax benefit on a home loan, the property must be in co-ownership. Moreover, many major banks in India have a lower home loan interest for women borrowers as compared to men. The rebate can vary from .05% to .25%, depending on the bank and loan amount.

So, perhaps the impact of increasing home loan rates is not as severe as it is popularly made out to be. The average Indian’s dream of owning his own home is stronger than most other impulses, and Indians have been conditioned to wait with bated breath for home loan interest rates to fall. If they put their aspirations for owning a home on indefinite hold because they believe that interest rates must be a key consideration, we will certainly see ‘fatalities’. However, we may be looking at a sentiment problem rather than a financial one.

The tricky element of sentiment

All other considerations and logic aside, sentiment does play a big role in any market.

As we have seen in the stock market, it can swing this way or that, sometimes without any real logical basis. Buyer psychology is equally fickle and can react to media stories, fake discounts and even religious sentiment. Given the minimal impact that a minuscule interest rate revision actually has on the overall cost of buying a home, it is also more than likely that a home purchase decision which has been put on hold purely on the basis of higher interest rates was never a serious decision in the first place.

The myth that interest rates are the one force that can or should make or break a home purchase is largely the function of a victim mentality. The same holds true for increased stamp duty. While the impact is real on paper, miracles have been known to happen when a chequebook lies on the negotiation table.

The proactive approach for first-time homebuyers to take in any given market scenario is to identify the right property, understand and leverage any existing Government benefits, and negotiate the best possible deal with a developer as well as a bank.

The prevailing school of thought dictates that the only way out is to wait for optimal property prices, lowest stamp duty and rock-bottom interest rates. However, if one understands that these are myths, the field opens up considerably.

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By Anuj Puri, Chairman – ANAROCK Property Consultants

Affordable Housing Keeps the Momentum Going  

• Unsold inventory down 2% from 7.11 lakh units in Q1 2018 to 7.0 lakh units in Q2 2018
• Unsold inventory declined 10% from 7.7 lakh units in Q4 2017

There has been a whopping 50% jump in overall new housing launches in Q2 2018 over the preceding quarter, with the maximum supply in the affordable segment (< ₹ 40 lakh). Interestingly, the affordable housing supply increased by 100% in Q2 2018 over Q1 2018, and this supply has led the overall growth.

On the sales front too, housing sales across the top 7 cities of India also rose by 24% compared to Q1 2018, indicating that hitherto abstaining home buyers are back on the market. Developers are working hard on clearing unsold inventory with attractive schemes, freebies and discounts. Moreover, the positive impact of the policy reforms including RERA and GST have begun to bear fruit.

Affordable Housing – 100% jump and key growth contributor Q2 supply

Q2 2018 New Launch Tracker

The top 7 cities (NCR, MMR, Chennai, Bengaluru, Pune, Kolkata and Hyderabad) witnessed new unit launches of around 50,100 units in Q2 2018as opposed to 33,400 units in Q1 2018. The major cities contributing to Q2 2018 new unit additions include Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, altogether accounting for 75% of the new supply.

• Approx. 6,900 units were launched in Pune – a significant rise of 214% from Q1 2018. Two large affordable housing projects comprising 1,900 units were the key contributors to the rise in new units hitting the Pune market in Q2.
• Hyderabad added 5,550 units in Q2 2018, a massive quarterly increase of 109%. The city has garnered prominent visibility on the Indian real estate map with its high liveability index vis-à-vis many other cities.
• Chennai’s new supply doubled to 4,200 units in Q2 2018 compared to only 2,100 units in Q1 2018 – a rise of 100%. Over 64% new supply was added in the affordable segment.
• NCR contributed 17% new supply with 8,500 units, a 89% increase over the previous quarter. Of this, 54% comprised of units in theaffordable segment.
• MMR saw maximum supply with nearly 13,600 units in Q2 2018, a significant increase of 58% over the previous quarter.
• Bengaluru added 8,800 units in Q2 2018, a quarterly increase of 28%. This city is maintaining its intelligent approach to changing market dynamics.
• Kolkata’s new launches recorded a drop of 61% from the previous quarter, with approx. 2,550 units. During the previous quarter, a large affordable housing project of around 3,500 units was a key contributor to the new launch supply. The drop noted in Q2 2018 reflects Kolkata developers’ focus on completing under-construction projects rather than launching new ones.

Improving Sales Figures

In terms of housing sales during Q2 2018, top 7 cities together witnessed an increase of 24% over the previous quarter. Around 60,800 units were sold in Q2 2018 with NCR, MMR, Bengaluru and Pune together accounting for 81% of the overall sales. End-user driven Bengaluru led the pack on the back of re-ignited interest from IT/ITeS professionals reacting to the mitigated job risks and overall favourable economic environment.

1. Bengaluru saw the highest jump in sales in Q2 2018, with sales increasing by 27% – from 11,500 units in Q1 2018 to 14,600 units in Q2 2018.
2. MMR sales rose by 26% – from 12,050 units in Q1 2018 to 15,200 units in Q2 2018.
3. Sales in Hyderabad increased by 25% over Q1 2018 with 4,750 units
4. Pune’s sales increased by 24% over the previous quarter with 8,400 units
5. NCR’s sales increased by 23% – from 9,100 units in Q1 2018 to 11,150 units in Q2 2018 – a significant improvement in market conditions.
6. Kolkata’s sales increased by 17% – from 3,420 units in Q1 2018 to 4,000 units in Q2 2018.
7. Chennai’s sales rose by 16% – from 2,320 units in Q1 2018 to 2,700 units in Q2 2018.

Unsold Inventory – The overall unsold inventory declined by 2% – from 7.11 lakh units in Q1 2018 to 7.0 lakh units in Q2 2018 (by 10% from 7.7 lakh units in Q4 2017).

Marginal Price Increase – Residential property prices across the top cities increased by 1% in Q2 2018 compared to the previous quarter, barring Chennai and Kolkata (where prices remained stagnant). The ample unsold stock is keeping price growth in check.

Dominant Segments – The market continued to be dominated by the affordable and mid-range segments. 77% (38,600 units) of unit launches were in the price category of less than INR 80 lakh. The affordable segment accounted for a whopping 46% share of the total new launches.

Conclusion:

Considering the growth in supply and sales in H1 2018, the upcoming festive season may finally be a vibrant one again, more so as more new launches across the major cities will offer buyers a wider spread of options and help control prices.

However, will infrastructure status to affordable housing and sops for MIG-I and MIG-II homebuyers under PMAY help fulfil the Government’s vision of Housing for All by 2022? It’s still hard to say, but what is certain is that affordable housing has kept the market’s momentum going for some time now. If developers remain laser-focused, add only relevant supply and ensure 100% RERA compliance, we may yet see this ‘dream project’ become a reality.

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By Prashant Thakur, Head – Research, ANAROCK Property Consultants 

Despite new launches decline, property prices in Yelahanka did not correct significantly and actually appreciated by 9% in the past 2 years

Existing since the 12th century, Yelahanka is closely linked with the origin of Bengaluru. The book ‘Bengaluru to Bangalore’ by T.V. Annaswamy mentions that the word ‘Yelahanka’ is derived from ‘Valipakka’, meaning ‘along the highway.’ Over a period of time, Valipakka (during Chola reign) transformed into Illaipakka (during Hoyasala reign) and finally into Yelahanka.

Rapid Development

The construction of the Kempegowda international airport was a game changer for the region and initiated Yelahanka’s metamorphosis from a sleepy little settlement on the outskirts of Bengaluru into a buzzing residential investment destination.

Yelahanka, which is divided into Old Yelahanka and Yelahanka New Town, is home to many defence establishments such as CRPF training school, Indian Air Force’s Air Force Station and BSF Training Centre. This micro-market also houses the largest facility of Mother Dairy in Karnataka, as well as the rail wheel factory (India’s largest manufacturer of railway wheels and axles).

Yelahanka enjoys excellent social infrastructure including educational institutions, healthcare facilities and entertainment options – and Kere Lake, Allalasandra Lake and Puttenahalli Lake (also a bird sanctuary) scale up the aesthetic value of the region. These factors have combined to attract investors and homebuyers to Yelahanka in droves.

Connectivity:

Yelahanka has an excellent connectivity quotient as it is accessible from various parts of Bengaluru through a well-established road and rail network.

Road

• The arterial roads that connect Yelahanka with other prominent areas of the city are NH 9 towards Doddaballapur and NH 44, which provides access to Devanahalli and the city.
• The elevated expressway between Hebbal and Yelahanka provides swift connectivity to the international airport.

Rail & Metro Rail

• The nearest railway station to Yelahanka is Yelahanka Junction which connects Bengaluru with the central, northern and western parts of the country via Guntakal Junction.
• Under phase III, a 32 km metro corridor has been proposed between Carmelam and Yelahanka. It is currently in the planning stage – construction is slated to commence in 2025 and conclude in the mid-2030s.

Air

• Yelahanka provides easy access to the Kempegowda International Airport, which is located 20 km away via NH 44.

Supply & Absorption 

• Between 2013 and Q1 2018, a total of 8,700 units have been launched in Yelahanka.
• The highest supply comprising 2,500 units was registered in 2015, after which the new launch supply has been declining marginally till date. This could be due to the implementation of the rule requiring any construction within a 10 km radius of Yelahanka to have a No Objection Certificate (NOC) from the Indian Air Force.

• Of the 3,300 units which are stacked in the unsold inventory, around 2,900 units are currently under construction. 
• Yelahanka has around 3,600 ready-to-move-in units, offering a plethora of options to the homebuyers and investors. While 2,300 units will be infused into the market in less than a year, another 2,800 units are likely to take more than a year for completion of the projects.

• Yelahanka’s residential market is dominated by mid-segmentproperties (₹40-80 lakh) accounting for 70% of the new launch supply since 2015, followed by 15% of properties in the ₹80 lakh-1.5 crorebudget range.
• Price Trends

  Property prices in Yelahanka have been on a constant rise constantly till Q1 2018. Interestingly, despite the impact of the economic reforms in 2016 and the decline in new launches, prices in Yelahanka have not seen any major corrections. In fact, property prices in Yelahanka have appreciated by around 9% in the past two years, with the average price as of Q1 2018 being ₹5,100/sq.ft.

  Outlook

  Apart from its immense historical importance, Yelahanka is now one of the most prominent residential hotspots in Bengaluru. Replete with well-developed social and physical infrastructure, this micro market is likely to witness increasing in tandem with the deployment of the proposed infrastructural developments in and around it.

  With maximum supply in the mid-segment housing category and availability of large land parcels, Yelahanka is one of the most promising real estate investment destinations in North Bengaluru. Moreover, leading builders have built several villa developments in Yelahanka, resulting in it also becoming a preferred weekend home destination.

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By Anuj Puri, Chairman – ANAROCK Property Consultants

The landmark reform of Goods & Services Tax (GST) was, in many ways, the final bullet shot to the Indian real estate sector in July 2017. The industry was already reeling under the immediate impact of DeMo and RERA.

GST was touted to be a gamechanger for all sectors including real estate. It was largely anticipated that GST will provide a much-needed respite to homebuyers by way of reduced property prices. Unfortunately, with GST completing one year, it emerges that these expectations were unrealistic.

While the tax-on-tax has been eliminated with the advent of GST, the overall outgo from homebuyers’ pockets seems to have increased by as much as 8% across cities. This ultimately reduces the demand in real estate. Also, the higher tax rate on purchasing a home – an already staggering expense for most Indians – has kept many home buyers and investors off the market.

Let’s understand this better.

• In real time, the cost of raw materials under the GST regime underwent minor changes – cement, paints and plasters were taxed at 28%, and iron material at 18%. Building housing with high-quality materials has bumped up the overall cost, as most materials used in the construction process fall in the 28% tax category.
• Moreover, end-users have not received any consummate benefit of GST because of the inherent ineffectiveness of the anti-profiteering provisions. They will only benefit if the base property prices are reduced and developers pass on the tax credits to their customers, which unfortunately is not happening.
• Another problem with GST is that it was restricted to under-construction properties, while ready-to-move-in homes and land were exempted from it. This considerably reduced end-user demand for under-construction properties. 
• Meanwhile, builders reduced the supply of the new housing projects. As per ANAROCK data, approximately 68,500 units were launched between January to May 2018 across the top 7 cities, which is 4% lower than the new launch figures for January-May 2017 (approximately 71,500 units).

Furthermore, despite the Government’s consistent efforts to promote affordable housing and fulfil its mission of ‘Housing for All by 2022,’ this critical segment is yet to see any significant positive impact of GST.

• Earlier this year, the Government extended the concessional rate of 12% GST for construction of houses under the Credit-Linked Subsidy Scheme (CLSS) in order to promote affordable housing, which was given infrastructure status in the 2017-18 Union Budget.
• While the effective GST rate came down to 8% post deduction of one-third of the amount the property incurs towards land costs, it did little to impact the overall absorption of homes in this segment.
• Moreover, back in 2015 under the PMAY scheme, the Government set a target of building 5 crore homes in less than a decade. However, as per data, India has added only 180,877 homes under the scheme since its launch, underscoring the challenge in achieving this ambitious target.

Thus, notwithstanding all efforts, the ‘real’ impact of GST is yet to be seen in the realty sector. Also, it is imperative that the Government engages with all stakeholders to address their concerns and work in harmony with them to bring in more clarity about GST for the sector and buyers alike.

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By Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

Residential Real Estate

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 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.

Pricing

• 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.

Launches

• 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.

Unsold Inventory

• 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.

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By Prashant Thakur, Head – Research, ANAROCK Property Consultants 

Project delays are one of the most alarming issues historically dogging the Indian real estate sector. The dearth of effective planning and execution of construction activities, escalating construction costs, approval delays, diversion of allocated funds to other projects and tepid sales are some of the predominant factors resulting in project delays. The homebuyer is, of course, at the losing end.

To put it in numbers, during 2017, out of the total 5.8 lakh residential units slated to be completed across the top 7 cities in India, only 1.5 lakh units were actually delivered until December 2017. This indicates that around 4.3 lakh units actually missed their stipulated completion deadlines.

The National Capital Region (NCR), one of the country’s largest residential markets, was seriously wounded by sudden policy changes, structural reforms – and the dubious practices of unscrupulous developers. As a result, it topped the list of cities with maximum project delays. Around 1.5 lakh units in NCR missed the 2017 deadline. The story in Mumbai Metropolitan Region (MMR) was no different with nearly 1.1 lakh units missing the said deadline.

NCR: Where project delays are the order of the day

In NCR, out of the total 1.9 lakh units expected to be delivered in 2017, only 42,500 units were given for possession as promised. Approximately 49% (~73,000 units) of the undelivered residential units were in Greater Noida, followed by 17% (~25,300 units) in Ghaziabad, 13% (~19,400 units) in Gurgaon and 11% (~16,000 units) in Noida.

• Greater Noida: A deeper analysis of the construction activity scenario in Greater Noida reveals some glaring issues. Developers in Greater Noida were expected to deliver around 84,200 units in 2017, of which only 13% were delivered and an additional 39,000 units (46%) are committed for completion by 2018 year-end. Due to the National Green Tribunal (NGT) directive, projects in Greater Noida have been stalled for years due to land litigations between farmers and the developers.
• Ghaziabad: Of the 29,300 units which were to be delivered in 2017, nearly 86% failed to meet their deadline. Only 14% have been handed over to buyers, and around 8,100 units (32%) are envisaged to be completed by year-end 2018. While a few projects have been sealed for recovering the Ghaziabad Development Authority’s (GDA’s) development charges, others face difficulties in obtaining completion certificates.
• Gurgaon: The Millennium City was also not able to deliver around 19,400 units in 2017; the delivery of these units was shifted to future dates. Out of 27,300 units committed for delivery in 2017, only 29% were handed over to buyers and around 14,400 units (53%) are being pushed for completion by year-end 2018. The good news is that most of the delayed units are likely to be completed in 2018, and the delivery of only limited units is being pushed to the subsequent years.
• Noida: Barring of construction activity within a 10-km radius from Okhla Bird Sanctuary between 2013-15 has stalled a large number of projects in Noida region. Out of the 23,900 units committed for delivery in 2017, 67% were unable to meet the deadline. Around 7,900 units (49%) of the delayed units are projected to be completed by December 2018.

In addition, a severe cash crunch due to syphoning of funds by developers for other projects, tweaked project details to bypass environmental/regulatory clearances, changing norms, water/sand crisis and red-tapism became some of the common causes of the long-delayed projects of NCR. Consumer sentiment was severely shaken by these delays and finally brought the sector to a standstill. Developers’ profits took a massive hit and their negative cash flows increased the delays even more.

Can NCRs developers beat the odds in 2018?

The above analysis talks only about the delayed projects that are anticipated to be delivered by the end of 2018. There is more to the story – namely the actually planned deliverables for the year 2018. Besides the delayed 79,400 units whose revised possession timelines are now December 2018, there are actually planned deliveries of around 86,600 units for this year. Altogether, NCR developers are expected to deliver around 1.66 lakh units (3.9 times the units delivered in 2017) by this year-end.

Will developers in NCR be able to deliver such a large number? That is certainly something that bears watching closely. With RERA expected to streamline residential real estate, homebuyers are hopeful that projects that have been stalled or slowed down over the years will pick up momentum and finally be delivered.

The Government authorities are certainly scrutinizing the issue by auditing long-delayed projects to chalk out initiatives and ensure their completion. All-in-all, with a massive number of residential units due for completion, year 2018 is a tough one for the NCR property market.

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