Gurgaon Real Estate Bites Reality

By: George Gonigal

There was a time when premium residential properties in Gurgaon were clocking appreciation of as much as 50 to 200 per cent in a period of 6-24 months but two years down the line things have changed a lot. Future of more than 50 per cent of the newly launched luxury apartment projects in Gurgaon is lurking in the middle, brokers inform.

Projects that used to sell within a few weeks of launching are now seeing tough times. In fact, a number of residential buildings, which are ready for possession have vacant apartments waiting for buyers. The hype seems to be over, says Vijaypal Singh, a Gurgaon-based property broker. He informed that given the property prices, investors have lost interest in Gurgaon properties. As far as the end-user is concerned, it is a tough job to convince him for buying a Rs 50 lakh apartment coupled with Rs 2,000 to Rs 8,000 of maintenance charges, he says.

Sanjay Maheshwari, another property broker, describes Gurgaon property markets on the basis of his experiences. 'For a highly-mobile corporate executive, Gurgaon does not make a very lucrative proposition. The city suffers power cuts of 10-15 hours a day. Though, the 24 hour power backup facility is available in the apartments, the generator costs goes to Rs 1,000 to Rs 3,000 per month. Now, how many people can buy a Rs 35-60 lakh apartment and pay such high costs in addition to the monthly home loan installments of Rs 30,000-Rs 75,000? Practically, it is impossible,' he says.

For investors, buying a Rs 50 lakh apartment in Gurgaon does not make sense. The capital values are not likely to move up in the next two-three years and blocking such large amounts in property is not viable for them, comments an investment advisor. If he buys property in consideration of rental income, it comes to 5-6 per cent a year, which is less than even the rate of return government securities offer. No green pastures for developers ahead...

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