Premium realty floods Delhi market, with high price tag

May 03 2014, 08:41 IST
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Builders are exploring the nooks and crannies of Delhi to extract additional supply of residential properties. Builders are exploring the nooks and crannies of Delhi to extract additional supply of residential properties.
SummaryWith exorbitant land prices, only supply entering the market is builder floors with a high price tag.

Central Delhi localities such as Jor Bagh, Chanakyapuri, Sunder Nagar are witnessing high demand for these units.

Neighbourhoods in western and northern parts of the city such as Punjabi Bagh and Rajouri Garden are seeing a pickup and so are parts of east Delhi. “As this is a very fragmented market, it is difficult to estimate the total supply,” says Arora.

Data from JLL India shows that the price tag of such properties is nothing less than premium and goes up to luxury. In south Delhi areas such as Vasant Vihar, a 400 square yard builder floor is available for around Rs 8 crore. In central areas such as Chanakyapuri, a 375 square yard floor is available for approximately Rs 17-18 crore. Northern areas such as Punjabi Bagh and Rajouri Garden have smaller floor sizes of 150 square yard, 200 square yard, 250 square yard, 300 square yard. A 300 square yard floor is available for Rs 3-4 crore.

“These are promoted as boutique properties. Therefore, the prices of these properties are usually higher as compared to properties within the neighbouring localities,” says Sachin Sandhir, MD, RICS South Asia, a standards and certification body for the real estate sector.

This prospect of high returns for builder floors has pushed several landowners into this space, which has led to a supply glut resulting in price reductions as inventory remains unsold. “There is a dip of almost 15-20 per cent in the prices of these builder floors. Many prime areas of south and west Delhi have seen a sharp decline as a lot of existing inventory has remained unsold,” says Sahil Kapoor, regional director, Delhi-NCR, Re/Max India, a brokerage firm.

Due to the oversupply of builder floors, the currently strained economic outlook, the ongoing liquidity crisis and the availability of comparatively cheaper and superior options in Gurgaon and Noida, the price points for builder floors in Delhi have definitely taken a beating, says Kumar. “Also, there has been no major spurt in job creation in areas such as south Delhi.”

Kapoor adds, “A south Delhi builder floor which has none of these (better amenities) to offer and has issues like parking, traffic etc.”

Kumar and Arora peg the decline in price points at 20-25 per cent on an average. “A 500 sq yd builder floor in Panchsheel Park, previously available for Rs 12 crore, is now available for Rs 9-10 crore. Similarly in Vasant Vihar, a 400 sq

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