Capital values of properties in Delhi NCR are likely to go up in the long term as land acquisition becomes an expensive affair
With most residential markets in Delhi getting saturated or middle class buyers, investors are looking for homes in the new upcoming locations of Golf Course Extension road, Faridabad, Bhiwadi or Ghaziabad. Those who have already invested in the much-in-the-news' affordable housing destination Noida Extension are in the `wait and watch' mode, hoping that the August 17 verdict of the Allahabad High Court will enable them to realise their dream of owning property in the NCR.
The 11th anniversary issue comprises a report conducted by HT Estates and KPMG on the future outlook of the evolving micro markets in Delhi NCR. “The study observes that newer sectors across the micro markets have been identified by developers as the preferred locations for residential development. These locations offer both affordable and premium housing options to investors and end-users,“ says Neeraj Bansal, director, risk consulting, KPMG in India.
The report observes that residential zones in the new planned sectors of Gurgaon (Sohna Road, Golf Course Extension Road and Dwarka Expressway), Neharpar area in Faridabad, Raj Nagar Extension and Crossings Republik in Ghaziabad and residential pockets in Bhiwadi are witnessing a spurt in affordable housing options, while locations such as Indirapuram, Vaishali and Vasundhara in Ghaziabad offer a mix of affordable and premium housing options. The report points out that a large portion of the upcoming supply will hit the Delhi NCR market by 2013-14. In the Golf Course Road Extension area, the supply scenario in 2014 is likely to be 1.8 times more than what was witnessed in 2012, and will see the availability of approximately 10,000-11,500 units.
In Golf Course Road, to cater to the growing demand of the location, approximately 9,500-10,500 units will be available by 2013 and in Dwarka Expressway, approximately 12,500-13,500 units will be available by 2014. By end of 2011, approximately 22,000 units of fresh supply are expected in Faridabad, of this approximately 28% will be contributed by Neharpar area.
As for capital appreciation, while Golf Course Road Extension is expected to grow at a compounded annual growth rate (CAGR) of 1620% during 2011-14, Golf Course Road may grow at a CAGR of 15-18% during CY1113. Dwarka Expressway is expected to grow at a CAGR of 11-13% during CY11-14, with the speedway being a major driver of growth. Capital values in the Neharpar area are also expected to grow at a CAGR of 5-8% during CY11-14.
The report points out that with a number of infrastructure developments around these locations, these micro markets are seen as prime growth zones. At the same time, the recent developments related to land acquisition in the NCR region have the potential to impact buyers' and investors' confidence in the short term.
However, capital values in these areas are only going to go up in the long term as land acquisition becomes a much more expensive affair.
