NCR’s Housing Construction Jump-Off: Terror or Opportunity?

Written by Sanju Bhadana:

The National Capital Region (NCR) recorded significant growth in new property openings last year. This is not only due to the infrastructural developments taking place around Delhi to ease commuting and increase the attractiveness of businesses and tourists, but also the rising aspirations and wealth of the middle class, the growing number of HNIs/UHNIs and , not forgetting the interest of NRIs, further strengthening its reputation in terms of cosmopolitan culture.

New launches rose 221% year-on-year and 29% quarter-on-quarter to 13,311 units, according to PropEquity data for the September 2024 quarter. With this, NCR’s share of total new launches has increased to 14% from 4% last year, surpassing Bengaluru and Hyderabad with 12% each.

New launches have increased drastically from 4147 units in Q3 FY2023 to 7072 units in Q4 FY2023, 11,948 units in Q1 FY2024, 10,308 units in Q2 FY2024 to 13311 units in Q3 FY2024 2024. NCR remains the only market in the September quarter where new launches exceeded sales. In fact, NCR saw launches exceed sales in every quarter of 2024. However, this was not the case in 2023.

Infrastructure boom

The twin cities of Noida and Gurugram have performed exceptionally well in terms of infrastructure development. From the Dwarka Expressway connecting Delhi to Gurugram to the Delhi-Mumbai industrial corridor and the soon-to-be operational Noida International Airport, the NCR has witnessed transformation like never before. The ever-expanding subway and high-speed rail networks have facilitated the culture of commuting from surrounding cities, thereby boosting the economy.

Irresistible offer for developers and investors

The growing interest of NRIs and HNIs/UHNIs as well as stock market winners, startup founders and young millionaires in the real estate in the region has also contributed significantly to increasing demand. Addressing regulatory challenges and policy uncertainties has also played a key role in increasing transparency. Not to be forgotten are the enormous returns that some of the micro markets have achieved after the Corona crisis. They have put up fences and prompted those who want to further increase their income to invest in second homes.

Noida is no longer considered a poor cousin of Gurugram. The city has moved toward premiumization in both amenities and pricing of real estate. With Noida International Airport soon operational, leasing activity for office and retail spaces has also increased, signaling a positive outlook and encouraging growth trends in the region.

The two regions also have a multiplier effect on the economies of Uttar Pradesh and Haryana. According to Cushman & Wakefield, the Delhi-NCR real estate market attracted the highest private equity investment of $633.3 million in the January-June period this year as investors look to capitalize on high demand for prime office space and luxury apartments to benefit. Its strategic location, emerging economy and growing population make it an irresistible proposition for developers and investors alike.

Price increase of over 100% between 2021 and 24

The PropEquity data further illustrates the selling pattern at NCR. Sales increased 22% year-over-year and 3% quarter-over-quarter to 10,263 units, earning the distinction of being the only city to experience growth in both new launches and sales! NCR’s share of total revenue also increased from 6.6% in the third quarter of fiscal 2023 to 10% in the third quarter of fiscal 2024.

The primary micro markets like Golf Course Extension, SPR, Dwarka Expressway etc. in Gurugram and Noida Expressway, Noida Extension and Central Noida in Noida witnessed a huge increase in prices. Between July 2021 and July 2024, the weighted average price of new buildings on Dwarka Expressway and Golf Course Extension Road increased by 101% and 53%, respectively. Similarly, Noida Expressway recorded an increase of 165%.

Diploma

The attraction of homebuyers to these micro-markets in NCR reveals a lot about the major role infrastructure development has played in the real estate growth in this region. The surge in new launches offers homebuyers the opportunity to choose the best real estate project that not only suits their lifestyle desires but also their financial goals.

(The author is Managing Director of 4S Developers)