pile of inventory and cautious buyer sentiments prevailing in the market amidst sluggish sales, the rental and capital values for high-end properties in Gurgaon saw a quarter-on-quarter decline by 3-12 per cent in calendar 2013 over the last quarter. The city saw reduction in investor activity with most enquiries generated by end users due to high gestation period of return and price points.
Demand & Supply
The total estimated demand for housing in top eight cities of India is pegged at 2.9 million square feet of which NCR is expected to generate the highest demand of 7,70,000 units mostly for mid-range and high-end segments in the period of 2013-2017. In the same time frame, the expected cumulative supply is expected to be around 6,00,000 — the demand- supply gap is expected to be approximately 22 per cent over the period. Some of this projected demand in the 2013-14 is expected to be met through the unsold inventory currently existing in the suburban and peripheral locations.
The gap between fresh demand and supply is expected to see an incremental expansion as supply will fall short on account of economic, regulatory and political scenario. However, some of the demand in the next couple of years can be met through the existing vacant stock.
In addition to the fresh supply, The New Delhi Master Plan 2020 is expected to unlock 66,000 hectares of land within New Delhi which is expected to largely cater to the residential sector. Thus new micro markets for residential development are expected to come up, it is yet to be seen in what proportion and configurations will these units will be created. While demand for housing units will grow proportionate to the rise in population, supply is expected to be less aggressive in the short to medium term. New regulations like the Land Acquisition Act and the real estate regulatory bill which are expected to come into force in the next few quarters will affect supply positively.
The author is executive director-residential services, Cushman & Wakefield India