Gurgaon Property Markets Respect Fundamentals

By: George Gonigal

Capital values of residential units have stabilized in Gurgaon and no upsurge is witnessed in the prices at least for the past three quarters, real estate developers operating in Gurgaon observe. Industry veterans inform that this 'price-stability' factor has paved way for end-users who were keeping away from the markets due to speculative pricing.

Manish Raina, a senior official at Castrol Oil, who recently bought himself a residential unit, shared his experience, 'We were trying to buy a house in Gurgaon for the past two years but found that prices were moving up in every 2-3 months. We really did not know what the realistic price of a property is and therefore decided to forego the plan till the prices stabilize.' Now that the prices are constant, Raina is all the way happy to buy an apartment in Gurgaon at the rate of Rs 3,700 per sq. ft. at Vipul Greens, Sohna Road.

He pointed out, 'Of course, I want to see appreciation in the value of property I own but it should be realistic. I am not a short term investor!'

'Real estate markets in Gurgaon, in fact, all across India witnessed a slowdown till year 2003, and after that an upward rally was witnessed with tremendous growth rate achieved by Indian economy. In this period, property values across the major cities of India soared. And, since the same growth rate cannot be achieved all the time, values are bound to rest at some point of time. It's good that Gurgaon property markets respect fundamentals,' said Kunal Banerjee, President-Marketing, Ansal API.

Agrees a senior official of Eldeco Group, 'Rising prices is not always an encouraging sign for property markets. When prices rise steadily and without any major reason, people tend to think that they will come down and thus avoid purchasing.'

He added that investors may drive the markets for a time period but it is the end-user demand due to which real estate industry sustains.

Similarly, India's second largest real estate developer Unitech feels that it is the end user segment that can maintain the demand for quality residential real estate, and it is good for both buyer and sellers.

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