The Delhi Development Authority’s plan to build over 16,000 flats in the national Capital will not affect property market in Gurgaon, Noida and Greater Noida because private developers offer better construction quality and facilities, said developers.
Some private developers claimed that DDA’s housing plan may instead prove to be a catalyst for the hitherto sluggish NCR real estate market, especially in Gurgaon, and trigger demand from the end users here.
However, real estate consulting firm CBRE did not agree with the assessment. It said new DDA flats in Vasant Kunj will have a bearing on demand in Gurgaon because of its proximity to the satellite city.
DDA proposes to build new 16,585 flats in Dwarka, Rohini, Vasant Kunj and east Delhi localities. Thirty-three per cent flats will be high-income group (HIG) units which may be priced in the range of Rs 1-R1.5 crore.
SPUR DEMAND IN GURGAON
AS Sivaramakrishnan, head (Residential Services–India) for CBRE says, “Gurgaon’s residential market is primarily driven by corporate end-users who prefer staying close to their workplace. Properties in the high income category in Gurgaon also have more appreciation value that other micro-markets in NCR. Having said that, given the close proximity of Vasant Kunj to the commercial hub of Gurgaon, this announcement may have an impact on Gurgaon’s residential market.”
Parveen Jain, president, National Real Estate Development Council, agreed. He said the DDA scheme will have no bearing on the real estate market in Gurgaon.
“In Gurgaon private developers offer better quality compared to state-owned development agencies. It won’t affect Gurgaon’s market even if flats come up in Vasant Kunj. Also, 5,000 HIG apartments is not a big enough number to impact the NCR market, which is flooded with supply,” said Jain.
Navin Raheja, CMD, Raheja Developers, claimed that the DDA’s announcement will help promote demand in the ‘sluggish Gurgaon market’ as prospective buyers would compare the two markets on price and location. “This will induce some movement in the real estate market,” he said.
GLUT OF FLATS IN NOIDA
According to Confederation of Real Estate Developers Association of India (CREDAI), there are 70,000 ready to move in flats available in Noida and Greater Noida.
“The DDA scheme will not at all impact flat sales in Noida and Greater Noida because government does not offer the quality a buyer desires in the house,” said Amit Modi, vice-president, CREDAI (Western UP).
“Private developers offer better construction quality, maintenance, roads, green areas and luxurious facilities like pool and club, etc. In the past, DDA schemes have disappointed buyers due to their poor upkeep and construction quality. Therefore, the scheme will not affect buyers’ sentiment,” said Modi.
In Greater Noida, a ready to move in flat is available for R2,800 to R4,000 per square feet or above. In Noida flat prices for ready to move in property begins at R4,000 per square feet.
Some real estate consultants said the realty sector is witnessing a slowdown since 2013 and the DDA scheme may have a negative impact.
“If DDA will offer a middle-income group flat for a reasonable price lower than what private developers in Noida and Greater Noida is offering then certainly it will affect sales. But it will influence only those who want to purchase a flat for investment purposes. End-user will make the choice based on the location of the workplace,” said Udayvir Singh, a real estate consultant in Noida.