Driven by lower interest rates, stable property prices and end-user appetite for bigger homes, the National Capital Region (NCR) has shown resilience in the performances of both office and residential asset classes during the year 2021. For instance, in its latest report, Knight Frank India has noted that residential sales in NCR surged by 65% YoY in the CY2021 with 35,073 housing units sold during the year, while new launches jumped by 110% YoY with the addition of 20,585 units.
According to another report by ANAROCK Research, the entire NCR saw housing sales increase by 73% — from 23,210 units in 2020 to 40,050 units in 2021. With this performance, NCR comes second only to MMR in terms of sales during the whole of 2021 as MMR witnessed housing sales of close to 76,400 units in 2021.
“Following a brief slowdown during the second wave’s peak, activity increased as fears of a pandemic faded. The RBI’s accommodative stance helped the residential sector. Given the heightened relevance of buying a home during the pandemic, backed by the work-from-home trend and low home loan interest rates, buyers’ sentiment was positive, resulting in developers’ confidence to launch new projects,” said Rajat Goel, Joint Managing Director, MRG World.
The Knight Frank report titled India Real Estate: H2 2021 also pointed out that two-third of NCR’s sales volume was recorded in H2 2021, comprising 23,599 housing units. “In the wake of a strong demand momentum, average residential prices have started increasing with a one per cent rise for the quarter ended December 2021,” the report noted.
Commenting on the year’s performance, Yash Miglani, MD, Migsun Group, said, “After a near-halt in 2020, the year 2021 started better, but the second wave hit the market in the first few months; however, after June 2021, the sector saw a rebound backed by all-time low home loan interest rates, good projects, and moderate pricing. The sales figures improved substantially as the year progressed. The number of new launches also rose as individuals became more aware of the value of real estate assets. In comparison to past years, larger homes, residences that promote a healthy lifestyle, and plots received more attention.”
The report also talked about the inclination in the region towards bigger residential units. It said that the share of projects with ticket sizes above Rs 1 crore was 37 per cent of the total sales in H2 2021 compared to 31 per cent in the a year-ago period.
“People realise the value of living a healthy lifestyle, reclaiming their lives, and reconnecting with their inner selves. People have been moving closer to farmhouses for the past year-and-a-half, and things have changed tremendously,” said Nayan Raheja of Raheja Developers, describing the advances in the sector as optimistic.
According to Knight Frank, total office transactions in NCR rose to 6.4 mn sq ft in 2021, and new completions witnessed an increase of 38 per cent YoY. The region saw office space absorption of around 4 mn sq ft in H2 2021 compared to 2.1 mn sq ft in the year-ago period. Gurugram witnessed 64 per cent of overall office space transactions in H2 2021 – 2.6 mn sq ft of office space, while Noida saw leasing activity of 1.1 mn sq ft (at par with H2 2020).
Talking about the office segment in Noida, Nikhil Anand, Director, Maasters Infra, said, “Noida is quickly catching up with other parts of the region in the commercial segment race in Delhi NCR. As connectivity increases, there is a greater need for real estate infrastructure, notably commercial space. Noida’s commercial viability will be boosted by the airport, Film City, and DMRC corridor. The Noida-Greater Expressway belt and the office zones (Sector 62 and 63) are particularly active. The physical and social infrastructure of this zone is undeniably better than those of other areas.”
The commercial segment in NCR is witnessing the introduction of high-quality assets.
Deepak Kapoor, Director, Gulshan Group, said, “The COVID-struck year 2020 post lockdown witnessed a phenomenon of pent up demand in residential sector. Lowest home loan interest rates acted as the catalyst. Customer preferences shifted to bigger homes with more rooms. Many developers had to bear the brunt of financial stress who could not deliver. So end-users’ demand ultimately moved to developers who continued to deliver.”
“As far as commercial realty is concerned, companies in the NCR are building market preferences based on good business rationale derived from comparisons with neighboring locations. Even small office spaces in Delhi are expensive, but Noida offers the most cost-effective options. Infrastructure expansions, particularly in the commercial sector, are expected to enhance the real estate market in Noida even further,” he added.