Real estate news on Looking back at Delhi NCR residential realty

Real Estate services, Delhi NCR, Real Estate Service (RES)
Posted on Dec 29, 2016
The year 2016 has been a roller coaster ride for the real estate sector. It would be wrong to mention that the balance of the sector was dishevelled by the turn of demonetization. Delhi NCR market has weathered against sombre sales, tussel with premium unauthorized areas (Sainik Farms, Anantram Dairy and Mahendru Enclave), pollution, and infrastructure, etc. Not surprisingly, transactions were not a strong point of the North market.

The ‘cheer around 2016

There were many other things to cheer about. Innovation, infrastructure development, redevelopment works, town planning, amongst others kept the market busy this year. The government was in its finest in relegating work to the local bodies and keeping a watch over them.

Government policies such as Demonetization, Real Estate Regulatory Act (RERA), Goods and Service Tax (GST), Benami Act, amongst others. Despite the long queues and media rage against the troubles that some of these policies have brought with them, their benefits though late are undeniable.

To make New Delhi a Smart City by the year 2018 as directed by M Venkaiah Naidu, urban development minister, NDMC has adopted extra measures to ensure the set-up of digital screens at all major locations to display useful information on weather, traffic flow, suggested traffic diversions and pollution. Initiatives have also been undertaken to disseminate information through FM and community radio. The entire NDMC area is also supposed to be provided with Wi-Fi connection.

Gurgaon, the upscale peer of the other NCR counterparts had been weighed down by a cash-strapped HUDA which had negatively affected the infrastructure updates that got delayed earlier this year. However, the renewing interest shown very recently by the Chinese conglomerate - Wanda Company is a big boost thumbs up for the real estate market.

The company would be investing over 10 billion dollars in the coming four years in building industrial parks, industrial units to manufacture cell phones and e-commerce platform and smart city in the 2,200 acres of land made available by the Haryana government near Kharkhoda. More tracts of land will be provided over the course of years. Industrial and office realty development almost always leads to residential development. This means, this micro-markets chance of getting a fresh lease of life seems imminent.

Noida was on an improvement drive (led by the state government) this year. Adding to this, the 5 per cent rise in the office rental worked for the eastern market of NCR. Some of the government directives were the return of unused leased land by builders in order to pay up the pending lease dues to the authorities.

The money collected in return will be used for project completion which will dissolve the roadblock between buyers and builders in Noida. Another example was the decision to not increase FAR in under-construction projects and upcoming projects. This means NOC and completion certificate will only be issued to builders when construction of common facilities gets completed, builders pay off their dues and on completion of infrastructure work of under-construction towers or projects.

Coming up - 2017
What do the developers have to say on 2017? Will it be a replica of the present year? Ranjit Naiknavare, director, Naiknavare Developers Pvt. Ltd says that things will change for good and some of them would be led by demonetization. He says, “Post February when there is more clarity on RERA, GST rates and the dust has settled from demonetisation issues, interest rates are expected to reduce and property prices to soften.  For every 1% decrease in home loan rates and with GST in vogue, we may see an increase in prices by around 2.5 to 5%.  So, the next two months will be perhaps the most opportune time to buy into projects.”

Fitch Ratings Inc., one of the well-known credit rating agencies on a report mentioned that due to demonetization, the credit profiles of particularly those companies will be hit which have aggressively expanded their land banks in the last two years, using cash collections from previously sold properties. Unsold inventory is expected to increase in 2017, particularly in the NCR.

Reduced prices of premium houses, lowered bank rates and a transparent real estate market should lure buyers for an investment. Consumer sentiments are hopeful about 2017 which is a positive sign. All four are good enough reasons to be optimistic about the coming year.

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