With renewed interest of investors in the real estate market, the Gurugram market is set to benefit in the long run as it promises steady growth.
Itâ€™s well-known that the real estate market in the Delhi-NCR region has skyrocketed in value over the past decade and continues to be an attractive property investment destination. However, given the astronomical increase in costs, the Millennium City witnessed a slight dip during the last quarter when compared to the previous quarter.
With its unparalleled connectivity to critical infrastructure, the logistical advantage is the market can soon pick up pace. Also, with renewed interest of investors in the real estate market, the local market is set to benefit in the long run as it promises steady growth.
Ever since the IT boom in the country, Gurgaon has become a favoured area for real estate stakeholders and has also seen investments coming in from abroad. With high per capita income, IT firms, best-in-class connectivity like high-speed metro, and state-of-the-art infrastructure, the region is now constantly on the radar of anyone looking to invest in real estate, especially in the residential category. The city is also conveniently located close to the Indian capital of New Delhi, which itself offers multiple advantages. Besides this, the governmentâ€™s initiatives, like the New Integrated Licensing Policy, have also played a role in unlocking the regionâ€™s potential for the real estate market.
The residential market in Gurgaon is brimming with opportunities for real estate investors of all kinds â€“ be it Expats, UHNIs, corporate professionals, or entrepreneurs. Speaking of residential properties, a recent report by PropTiger.comrevealed that 3BHK apartments were the preferred configuration in Q2 of 2022, claiming 42% of the share in overall sales. With respect to the budget range, the report revealed that over 51% of the homes sold during the same period fell in the INR 1 cr+ price bracket.
Additionally, with Indiaâ€™s startup ecosystem booming and the skyrocketing entrepreneurial culture, Gurgaonâ€™s standing as one of the hotbeds in the country for real estate has increased. Data shows that there are nearly 1500 startups in Gurgaon, further cementing the region as a goldmine when it comes to real estate investments. In fact, most of the units launched were sold in the micro markets of Sector 89, Sector 106, and Sector 62 in Gurgaon. The region has also witnessed a 9% year-on-year growth in property value, with prices falling between INR 6400 and INR 6600 as of 30th June 2022.
Aspects like the aforementioned, alongside the massive shift in consumersâ€™ approach towards the residential real estate market and their preference for modern amenities, accessibility, an immersive lifestyle, and open, ventilated spaces, have made the city a goldmine of potential for real estate players. Besides, as residential properties continue to be built in Gurgaon, NRI investors also see the region as a plausible option for investments. In fact, in FY22, NRI investments in Indian real estate were approximately USD 14.9 billion, a number that was predicted the previous FY, with Gurgaon being the top choice in the northern section of the country.
As demand failed to pick up despite better overall housing affordability backed by a record low-interest rate regime, inventory overhang has reached precarious levels for the cityâ€”based on current sales velocity, developers in Gurugram would need 82 months to sell out their existing stock. This is the highest inventory overhang seen in any city covered in the report. As on June 30, 2022, Gurugram had an unsold inventory consisting of 39,878 units.
A brief comparison
While the Delhi NCR region is densely populated with several business professionals, entrepreneurs, and other workers residing, Gurgaon scores higher compared to the surrounding regions. For instance, compared to Noida, Gurgaon ranked higher on the safety parameter with fewer incidents of theft, vandalism, and armed robbery and it is closer to Indira Gandhi International Airport. The city also scored higher when it came to the trust factor, while even reputed real estate brands failed to complete projects in Noida. Overall, Gurgaon is a fast-growing market for real estate investors and offers plenty of opportunities.
The road ahead
Like most other industries, the pandemicâ€™s impact on real estate, too, has been profound, and itâ€™s reflected in how the segment operates, consumer preferences, expectations, and the increasing interest of investors in certain regions like Gurgaon. With plenty of positive trends, itâ€™s safe to say that the Gurgaon real estate market will benefit immensely from the surge in realty investments. After all, the city offers something for all.