The real estate sector in Gurgaon seems to have finally started coming out of a multi-year slump.
This inference can be drawn from the first study of its kind by Haryana Real Estate Regulatory Authority (H-Rera) of the city’s property market in 2018 and 2019 that found a 45% rise in residential launches in 2019 over the previous year. In 2019, Gurgaon also recorded its highest-ever sale of 8.6 million square feet in the office space market, a 17% growth year-on-year.
The H-Rera study found 8,016 residential units were launched in Gurgaon in 2019 compared with the previous year’s 5,540 units. And the unsold units came down to 42,729 last year over 2018’s figure of 49,702 — a decline of 14%.
Unsold residential inventory saw a decline of 14% in 2019 over the previous year, according to the study. But while the signs of a revival are there, the average residential property price saw only a marginal increase of 4% year-on-year — from Rs 4,240 per sq ft in 2018 to Rs 4,431 per sq ft last year.
In the office space segment, some of the locations that witnessed major traction in the second half of 2019 included the Southern Peripheral Road, Golf Course Road (extension) and Cyber City.
Gurgaon has remained the preferred choice for corporate firms and because of the dearth of quality office spaces, even the under-construction office stock is seeing enquires for pre-lease, according to the study. And the sectors, other than IT, which were key consumers of office space included co-working spaces, media and consulting companies, e-commerce and legal firms.
Registering a year-on-year growth of 17% over 2018, the leasing activity in Gurgaon was driven by companies such as Concentrix, Google, Oyo, Huawei, Simpliworks and Genpact, which, on an average, leased over 50,000 sq ft of floor space, according to the Rera study.
“The developers in the region are carefully assessing the demand and also concentrating on completing projects at hand,” said H-Rera chairman KK Khandelwal. He said the developers have also taken cognisance of the slow sales velocity and “are keeping a cap on any upward increase in prices”.
The H-Rera chief saw in the numbers a resurgence in the realty market since the downward trend started in 2016. “Speculative locations such as Dwarka Expressway, which were marketed as investment destinations in 2010-2011, failed to yield expected returns for the buyers due to delay in project executions. Along with this, the lag in infrastructure completion and various land-related litigations pulled the reins of the real estate market down in the three years,” Khandelwal said.
However, Prashant Solomon of Credai-NCR, said, “Despite the delays in the construction of Dwarka Expressway, the area is witnessing incremental demand over the years. Due to its proximity to Delhi and Gurgaon, the Dwarka Expressway area has a huge potential and would evolve as the next popular residential and commercial hub in NCR.”
TOI had last month reported, quoting a report from real estate consultants Anarock, that Gurgaon is also the most-preferred city for renting out homes in NCR.
According to the Anarock report, the rental yield is 3.5% in Gurgaon which is higher than the national average of 3%. In Noida, it is 3.2%, Delhi 2.2% and Greater Noida 2%, the lowest in the area. Rental yield is the annual rate of return an investor can earn from his property.