Property prices across micro markets of the National Capital Region (NCR) have risen by an average 15-20% in the past one year, shows the latest report by financial services firm Motilal Oswal Financial Services. The report attributes this remarkable growth to strong offtake and limited supply.
The findings of the report are based on the analysis of 8 project visits across key micro markets of Gurgaon, Noida and Delhi.
While stating that the price increase has kept investor interests intact in real estate, it has also led to sustained momentum in the mid-income category.
“About 20-30% of total absorption is investor driven and goes as high as 40-50% in emerging micro markets such as New Gurgaon and sectors along the Dwarka Expressway,” says the report.
According to the report, prices in areas along the Golf Course Extension Road in Gurgaon have risen to Rs 16,000 per square foot (psf) from Rs 13,000 psf six months ago. Similarly, in areas along Gurgaon’s Sohna Road Market, rates have moved up to Rs 8,000-10,000 psf from its Rs 7,000 earlier. New Gurgaon has reported a price appreciation of Rs 1,500 psf to Rs 9000 in the past six months. Sectors along the Dwarka expressway have witnessed pricing inching up to Rs 15,000 psf from Rs 12,000-13,000 in May, 2022.
While stating that prices across these markets have risen 50-70% in the last 2 years, the report points out that prices of GPL’s project in Sector 43 Noida have increased to Rs 13,000 psf as against Rs 10,000 psf in March 2021.
According to the report, land prices have doubled over the last two years, making projects economically unviable for most players, limiting the supply from developers with limited land reserves. Price growth in these markets is also being driven by a connectivity boost, says the report.
“Gurgaon continues to undergo certain infrastructure development cycles, which are bringing certain far-off markets closer to the commercial hub, driving demand and pricing in those markets. Construction of the Badshahpur-Sohna Road has cut travel time from the Golf Course Extension Road to Sohna by 20-25 minutes. Completion of the Clover Leaf Flyover will improve connectivity between the Southern Peripheral Road (SPR) to the Central Peripheral Road (CPR), improving connectivity for New Gurgaon to Gurgaon’s commercial hub,” says the report.
“Similarly, the completion of Dwarka Expressway will improve connectivity of sectors along the highway to Delhi. The UP government plans to promote the sector between the planned Jewar airport and Sector 150 as a commercial hub, which will drive up residential demand in and around the area.” It adds.