Factors like commercial prominence, proximity to Delhi, increased net profitability, good connectivity and ROI are some of the main reasons for NRI`s favoring investment in the Delhi-NCR region, says Ravi Saund COO of Delhi based CHD developers to myiris.com.
In the last couple of years Gurgaon has witnessed tremendous growth in terms of appreciating real estate value. The NH8 expressway, recent metro rail link and the upcoming Dwarka expressway or National Periphery road (NPR) have impacted areas that otherwise remained unconnected earlier in a big way, adding to the already booming real estate development in this sector. The growth of commercial sectors in areas near Gurgaon has also given a boost to development of the real estate properties thus adding to increased NRI investments in this sector. Since August 2011, the rupee has depreciated 25% against the dollar, 15% against the euro, 10% against the Singapore dollar and more than 15% against the UK pound. So, NRIs from all over the world are showing a lot of interest in properties in Delhi, Gurgaon, Noida and Greater Noida. The NRI investment in this region has cumulatively increased by 40% in 2011 especially since August 2011 as compared to the same period last year. The steady growth in the mid and affordable housing segment will further increase NRI investment in 2012.
According to Mr. Saund, key real estate trends in 2011 and forecast for the Delhi-NCR market for the year 2012.
A few key trends that affected the real estate segment are:
Liquidity concerns: During 2011,limited access to funds, increasing cost of debt and high construction costs remained a concern for developers. Decrease in gross bank lending (RBI data shows, gross bank lending to real estate sector has grown by 11.6%, compared to 15.7%during the corresponding period last year) and comparatively lesser influx of FDI due to a weak Europe market led to a liquidity crunch for developers in 2011.
Regulatory changes: The sector saw many events which had both political and social impact for the nation. The Noida Land Acquisition problem, demand for separate state for Telangana in Andhra Pradesh, land scams like Adarsh Co-operative Housing Society, LIC Land scam have been events which will mark the start of fresh reforms in the sector.
Not all was gloomy in the real estate segment. Commercial sector grew healthier and stronger in 2011. Retailers continued to expand their footprints. NCR showed highest absorption rate. Mid-income and budget housing segment saw maximum launches and were a success all through.
In the year 2012, the residential market will remain cautious over the short term because of global uncertainty, inflation. A welcome signal is that now there is little chance of further interest rate hikes by the RBI in the first quarter of 2012. The borrowers are not likely to postpone their buying decisions. The possible slowdown in India`s GDP growth rate act as a dampener. But relative to other countries still this will look decent. Still investors will shake off their hesitation when the Indian stock market again becomes a favoured investment destination.
There might be a fall in the sales as we assume that the ratio of sales over the inventory would not be proportional. The construction activities will temporarily slowdown. Hence, there will not be much new project launches in the premium category. However, the mid-segment and affordable-segment are likely to grow. In order to benefit in the long run, developers would have to concentrate on timely execution of projects.
Posted: 12 Jan 2012 03:46 AM PST
Accommodation Times Bureau
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