Decline in Real Estate Transactions in Delhi-ncr

By: George Gonigal

There has definitely been a slowdown in the Delhi NCR market though the property values are still holding. In the recent months, even though there has been no sharp decline in the real estate markets of Delhi and NCR, but there has been a marginal decline in transacted values. The asking values remain more or less the same but the volume of transactions has definitely reduced.

The slowdown has been specifically in the residential property segment and the factors which have contributed to the slowdown are rising interest rates from March 2006-August 2007 as well as the intense speculation in the preceding period rising property values.

In the suburban markets, the property values have dropped only marginally. The number of transactions has dropped but new properties coming up in the suburbs have been offering more values for the money invested. This is largely because there is a huge amount of stock nearing completion in the suburbs. Most sales in the suburbs are driven by infrastructure initiatives. In some cases, the values in suburbs are at a peak because the demand for premium property has become very robust. Also with the presence of IT & ITES companies largely in the suburbs, the rental market has picked up like never before.

Prime Central and South has witnessed steady purchasing activity. This may be attributed to the fact that the availability is limited in South & Central Delhi. Many investors, High Net worth Individuals HNI as well as NRIs are focused there. Most of the sales have been in the small developments on old plotted areas where developers are building single floors.

There is hardly anything available for the middle and the lower middle classes. There is nothing in studio apartment or the two bedroom category. The actual buyer is definitely there but is waiting for values to stabilize or interest rates to dip. Most of the affordable properties that are being launched now are in the peripheral areas where infrastructure is planned but yet to come.

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