It is well known that the value of the property market in the Delhi-NCR region has soared over the past decade and continues to be an attractive property investment destination. However, given the astronomical increase in costs, the Millennium City saw a slight decrease in the last quarter compared to the previous quarter.

With its unparalleled connectivity to critical infrastructure, the logistical advantage is that the market may soon accelerate. Moreover, with the renewed interest of investors in the real estate market, the local market should benefit in the long term as it promises steady growth.

World-class infrastructure

Since the IT boom in the country, Gurgaon has become a prime area for real estate players and has also seen investment coming in from overseas. With high per capita income, IT companies, top-notch connectivity like high-speed metro, and state-of-the-art infrastructure, the area is now constantly on the radar of anyone looking to invest in real estate, especially in the residential category. The city is also ideally located near the Indian capital New Delhi, which itself offers multiple advantages. In addition, government initiatives such as the new Integrated Licensing Policy have also played a role in unlocking the region’s potential for the real estate market.

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Opportunities galore

Gurgaon’s residential market is brimming with opportunities for property investors of all kinds – be they expats, UHNIs, professionals or entrepreneurs. Speaking of residential properties, a recent report by PropTiger.com revealed that 3BHK apartments were the preferred configuration in the second quarter of 2022, claiming 42% share of overall sales. As for the budget range, the report revealed that over 51% of houses sold during the same period fell within the INR 1 cr+ price range.

Moreover, with the booming startup ecosystem in India and the soaring entrepreneurial culture, Gurgaon’s position as one of the country’s hotbeds for real estate has grown. Data shows that there are almost 1500 startups in Gurgaon, further cementing the region as a gold mine when it comes to real estate investments. In fact, most of the launched units were sold in the micro markets of Sector 89, Sector 106 and Sector 62 in Gurgaon. The region has also seen a 9% year-on-year growth in property values, with prices ranging between INR 6,400 and INR 6,600 as of June 30, 2022.

Aspects such as those mentioned above, as well as the massive shift in consumer approach towards the residential real estate market and their preference for modern amenities, accessibility, an immersive lifestyle and open and ventilated, have made the city a mine of potential for real estate players. . Further, as residential properties continue to be built in Gurgaon, NRI investors are also viewing the region as a plausible option for investment. In fact, in FY22, NRI’s investments in Indian real estate stood at around $14.9 billion, a figure that had been forecast for the previous fiscal year, with Gurgaon being the top pick in the northern part of the country.

Market downturn

While demand has not recovered despite better overall housing affordability supported by a record interest rate regime, excess inventory has reached precarious levels for the city – based on the current speed of sales, Gurugram promoters would need 82 months to sell their existing stock. This is the highest inventory surplus seen in any city covered in the report. As of June 30, 2022, Gurugram had an unsold inventory consisting of 39,878 units.

A brief comparison

While Delhi NCR region is densely populated with several residing professionals, entrepreneurs and other workers, Gurgaon scores higher as compared to surrounding regions. For example, compared to Noida, Gurgaon ranked higher on the security parameter with fewer incidents of theft, vandalism and armed robbery and it is closer to Indira Gandhi International Airport. The city also scored higher on the trust factor, while even reputable real estate brands failed to complete projects in Noida. Overall, Gurgaon is a fast growing market for property investors and offers plenty of opportunities.

The road ahead

Like most other industries, the impact of the pandemic on real estate has also been profound and is reflected in the functioning of the segment, consumer preferences, expectations and growing investor interest in certain regions like Gurgaon. With many positive trends, it is safe to say that the property market in Gurgaon will benefit immensely from the surge in property investment. After all, the city offers something for everyone.

(By Vikas Wadhawan, Group CFO, Housing.com, PropTiger.com & Makaan.com)

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