Rahul Rawat, a project manager working with a multinational firm in Gurgaon, wants to buy a two-bedroom apartment in Noida before he gets married next year. But commuting between the two cities daily will be a tough task. Owning a 1000-square feet apartment in Gurgaon costs at least Rs50 to Rs55 lakh. Even for a well-earning Rawat, this is an unthinkable price.
Several localities in Gurgaon saw an upward trend in property prices over the last few years. Even real estate prices in Delhi also skyrocketed by 20% to 27% in the first quarter of 2011 compared to last year.
The situation in Gurgaon is such that houses have gone beyond the reach of corporate executives, including those who enjoy fat pay packages.
According to a reliable real estate industry report, the value of properties on Sohna Road and DLF City Phase 4 has increased the highest, with prices rising by at least 46% in the first quarter of 2011, while it was 42% during the same period last year.
Property prices in Sector 57 and Nirvana Country rose by 37% in the first quarter of 2011 as against 36% increase during the same period last year. The cost hovered between Rs4,800 per square feet and Rs5,553 per square feet in the current year's first quarter.
The high realty prices in Gurgaon have burned a hole in the pockets of even well-paid executives. This situation is forcing them to invest either in 'affordable' NCR cities such as Faridabad or Ghaziabad, or to buy apartments in far-flung areas beyond Manesar, which is over 20 km away from Delhi-Gurgaon border.
Property advisors, too, say affordable housing is no longer possible in the Millennium City.
"It will be impossible for a middle-class person to buy a house in Gurgaon. The only choice left for people is to shift to Daruhera or Bhiwadi. However, within Gurgaon limits, one can book a flat in the new sectors between Sector 81 and Sector 110," said Anckur Srivasttava, chairperson of GenReal Property Advisers.
"These are located along the northern peripheral road. Flats are still available at Rs2,500 to Rs2,600 per square foot, which is affordable," said Srivasttava.
Why prices rise?
The unreasonably high property prices are due to multiple reasons. Gurgaon is close to the international airport, there is a large concentration of BPOs, IT and ITeS companies as well as big multinationals.
High-earning people who work in Gurgaon prefer to buy houses here, which have led to demand overtaking supply manifold in the last few years.
Developers in Gurgaon are also mandated to maintain a density of 300 persons per acre, which is why barely 60 dwelling units can only be constructed on an acre.
However, in Noida and Greater Noida, the capacity is 660 persons per acre, thus increasing the scope of affordable housing. Another significant reason is high cost of raw material and land. To develop a township in Gurgaon, developers acquire land from landowners, who in turn often sell at inflated prices.
"Farmers who live closer to the city are aware of the market rate of precious land. It is hard for developers to convince them to sell at affordable prices," said Srivasttava.
With no option left other than the Rs50 to Rs60 lakh houses in Gurgaon, executives are moving away from the main city.
Amit Sahni, a 33-year-old executive from Patiala, who works with a market research company, said he can't find anything within his moderate budget of Rs50 in the heart of Gurgaon.
"The only option I have is to buy a 2 BHK house in the new sectors beyond Manesar, somewhere in Daruhera," added Sahni.
Another executive in his early 30s, Vineet Mohan, a telecom engineer, was ready to settle for an apartment in far-flung sectors such as Sector 55 and Sector 56. There a three BHK flat is available for not less than Rs80 lakh.
"But now I plan to buy a house in Noida," said Mohan, who is currently staying at a rented house in Sector 43.