New ‘high density’ policy will boost affordable housing in NCR

Delhi/NCR

The Haryana government recently approved a ‘high density’ housing policy under which agencies like the Haryana Urban Development Authority (Huda) will allow developers to increase the density of population in their group-housing projects. Realty players believe that the new high density policy will motivate builders to construct more small-sized housing units in a given area. The development authorities are also offering private builders incentives to construct low-cost housing units as per the revised population density norms. In the normal group-housing projects, the density is 300 people per acre (PPA) plus 20% variation, while in the high density projects, the new norms will permit 445 PPA.



Also, in the new draft development plan of Gurgaon-Manesar Urban Complex-2031, the Huda has reserved 125 acres for affordable-housing projects in Sector 68. As per existing norms, there will be only 300 people per acre, which means one cannot construct more than 60 units in an acre. If the population density is increased to 900, then 180 units can come up on an acre.

Plan to improve road network to the increased density:

To provide maximum housing, the town and country planning department of Haryana has decided to increase the sectoral density from 80 PPA to 100 PPA and from 100 PPA to 120 PPA in all development plans of the town and the cities in the state.

Accordingly, it has proposed to improve the road net- of areas like Sectors 58/61, /62, 60/63, 62/65, 63/64, 65/66, 68. In Sector 68, a pocket of nearly 50 hectares with density of 1,125 PPA has been reserved, paving the way for construction of smaller flats for providing housing to low- and medium-income groups.

In order to absorb the impact of the increased density on the environment of the sectors, additional area for infrastructure would be provided in the already planned or developed residential sectors.

The minimum width of the roads in a residential colony or sector would not now be less than 12 metres. The minimum area for parks or open spaces in a residential colony or sector would be planned in such a manner that it would meet the minimum norm of 2.5 sq metres per person.

In addition, so as to provide affordable housing to the public, the government is mulling a separate policy where it would fix the upper sale price and make the entire allotments itself. All the development plans of sectors will now adopt the norms of New Master Plan-2031. The new draft plan also converted the use of land earmarked by the industries department along KMP expressway into an agriculture zone; no CLU or licence would be granted in this area so that it is used only for agricultural purpose. The new plan also earmarked land for a university over 200 hectares along the newly proposed bypass near Sector 68 in Gurgaon.

Keeping in mind this additional allocation of land, the small pockets of public and semi-public uses proposed along the sector-dividing roads in Sectors 71/89A would be marked off while the site of the town park in Sector 89 would now be along the sector-dividing road of Sectors 89A-95A.

A part of the strips earlier reserved for public and semi-public use in Sector 71 may now be allocated for residential use.

Nearly 50 hectares may also be reserved for affordable housing in Sector 68 adjoining the newly proposed university site, as has been done in case of Sohna and Farrukhnagar Development Plan, to provide housing to low- and medium-income groups.

In order to improve the road network of Sector 70A, the development authority has proposed to eliminate the eastern road of sector-dividing road of Sectors 69 and 70 and also to extend the western, outer road of Sector 70A up to the proposed extended roads of Sector 69-70. The triangular space generated due to this amendment may be allotted for the development of a town park.

Why the new policy:

The Haryana state government has committed to deliver nearly 75,000 housing units across the state, in the price range of Rs 15-30 lakh per unit. Out of this, a substantial number of houses will come up in Gurgaon. The Huda is all set construct 11,000 housing units for economically weaker sections (EWS) and lower income groups (LIG) in Sector 68 in Gurgaon. The minimum size of apartments available in the realty market of Gurgaon starts at 1,350 sq ft and above, costing upwards of Rs 75 lakh, while the average size of the units is 1,700 sq ft with a price of more than Rs 1 crore.

R K Arora, CMD of Supertech Ltd, says: “The high density policy benefits both buyers and developers. The Huda in the public sector and the licensed colonizers in the private sector have played a prime role in the planned development of Gurgaon-Manesar Urban Complex. Both have collectively developed around 8,000 hectares for residential, commercial, institutional, and industrial purposes.”

Ravi Sound, COO of CHD Developers, says: “In order to cater to the future demand of the Gurgaon-Manesar Urban Complex, an additional area of 22,957 hectares has been added in the form of urban usable area, which has the potential to accommodate an additional population of 20 lakh. Thus, the total urbanizable area of Gurgaon-Manesar Urban Complex would accommodate nearly 42.50 lakh people by 2031. This is one reason why the high density policy was brought in — to accommodate the projected population growth of this area.”

Realty projects:

Many developers and promoters like Supertech Ltd, ILD, Era Landmark, etc, have launched new realty project in Sector 68 located near Golf Course road.

In Sector 68, Gurgaon, Supertech Ltd has launched Araville 2, which offers 3- and 4BHK units on 50 acres. Era Landmark has also launched a project, Sky Ville, in Sector 68; this project offers 2- and 3BHK units of 1,200 sq ft, 1,446 sq ft, and 1,827 sq ft.

With modern-living options and excellent connectivity, Sector 68, reserved for the high density projects, is all set to become the next big realty destination in Gurgaon.

Source :- http://content.magicbricks.com/new-high-density-policy-will-boost-affordable-housing-in-ncr/

Delhi-Gurgaon Expressway: Opening new areas for development

The main advantage of NH-8 development was enhanced and high-speed connectivity between Delhi and the commercial hub, Gurgaon. But Brix Research finds that its impact has been even more in areas that earlier remained unconnected

January 2008 marked the completion of the much-awaited Delhi Gurgaon Expressway, which added to the already booming development in the city. Improved connectivity and a sharp reduction in travel time, both within the city as well as to and from the national capital, were only some of the factors that made National Highway 8 (NH-8) the preferred route for residents of Delhi and Gurgaon. Local realtors cite this as the driving force behind rising real estate values witnessed by Gurgaon post-2008, while other cities in National Capital Region were witnessing stable or a decrease in values.

Brix Research tracks the changes in real estate values and subsequent development of localities in Gurgaon, which are directly linked to the expressway by being situated near one of its many entry or exit points. Upon entering Gurgaon via NH-8, one will encounter Exit 5, opposite Exit 18. Prime commercial areas of Gurgaon close to these exits are Udyog Vihar, DLF Cyber Greens and Ambience Island. Ambience, DLF City Phase II and III are prime residential localities.

Local realtors observe that much of the value appreciation experienced in these localities had begun prior to completion of the expressway, in anticipation of advantages that it would offer. Hence, there was no immediate impact on real estate values on completion of Delhi-Gurgaon Expressway. However, if we compare residential values for multistorey apartments in 2004 to those in 2008, there appears to be a 100% increase, from Rs 3,500 per sq ft to Rs 7,000 per sq ft. In commercial segment, establishment of Cyber Greens and Udyog Vihar as commercial hubs of the city was possible only because of their easy access from NH-8 and a reduction in travel time from New Delhi.

Commercial capital values were approximately Rs 10,000 to Rs 12,000 per sq ft before the expressway was operational, and have risen to Rs 12,000 to Rs 15,000 per sq ft currently. This development is not without its drawbacks – traffic congestion is a serious issue, especially at the toll plaza. During peak hours, it can easily take up to an hour to cross the toll plaza. However, S K Mehta, a local realtor, says, “The benefits that construction of this expressway offered in terms of employment and connectivity far outweigh drawbacks due to traffic congestion. The real estate values have also not been adversely affected by these drawbacks.”

Exit 6/Exit 17 are situated near localities like MG Road, IFFCO Chowk and Sukhrali. Residential values of these areas witnessed significant appreciation, almost 100%, as they rose from Rs 4,000 per sq ft in 2005-06 to Rs 5,500-5,600 per sq ft post completion of the expressway, and currently quote at Rs 7,000 per sq ft. Commercial values, however, witnessed a 50% rise across both office and retail spaces post-2008. While traffic congestion at IFFCO Chowk has been cited as an issue, it has had no significant impact on real estate values in these localities. Situated near Exit 7/Exit 16 are localities like South City I, Sushant Lok and Sector 14. In these areas, too, residential values have witnessed an appreciation of approximately 100% with current values at Rs 6,000 per sq ft, up from Rs 3,000 per sq ft before the completion of the expressway.

Commercial values too, have witnessed significant appreciation, from Rs 5,000 to Rs 6,000 per sq ft before completion of the expressway, to their current value of Rs 12,000 per sq ft. According to local realtors, the significant appreciation of values could be due to better connectivity, which led to relocation of many Delhi-based companies to prime commercial destinations like Signature Towers, Cyber Park, etc. “Demand for retail space in these localities is very high as compared to supply. This is due to better connectivity, facilitated by the completion of Metro rail link as well as the expressway,” says Mehta. Exit 8/Exit 15 lead to localities like Jal Vayu Vihar and Sector 30-31. Residential values witnessed 10-15% appreciation in these areas. Some projects like Uniworld City and Uniworld Spa launched by Unitech have witnessed significant appreciation since 2004. Bookings started from Rs 2,400-2,500 per sq ft and are currently quoting at Rs 6,000 per sq ft. Exit 9/Exit 14 take one to localities like Jharsa Road, Sector 15 and Sector 32. Of these, Sector 32 is an institutional area, which was fully developed and comprises plots allotted by HUDA to end users/developers for specific purposes. Most development in this locality occurred after construction of the expressway with very little development prior to 2008.

The current commercial projects are BPTP Park Central, DLF Star Mall and Bestech’s commercial projects. DLF’s ITSEZ is also under construction. Raheja Atlantis is one of the residential projects with ready-to-move-in apartments and has witnessed 20-25% appreciation in values since completion of the expressway. Availability of retail space is less, compared to demand, which justifies its high value at Rs 16,000 to Rs 18,000 per sq ft, up from Rs 5,000 to Rs 6,000 per sq ft prior to 2008. Local realtors say the maximum development after completion of the expressway was seen at localities situated at Exit 10/13 viz. Sohna Road, Rajiv Chowk and Secretariat. Residential values have risen from Rs 2,000 to Rs 2,200 per sq ft prior to 2008, to the current Rs 4,500 to Rs 5,000 per sq ft. New residential projects include Unitech’s Uniworld Garden, whose values have risen from Rs 1,575 per sq ft when bookings started in 2005 to their current rate of Rs 4,200 to Rs 4,300 per sq ft. Vipul Greens is another project which witnessed similar trends post-2008, as also Vatika City. The commercial values in these areas have risen from Rs 3,500 to Rs 4,000 per sq ft to Rs 5,000 to Rs 6,000 per sq ft.

A number of new projects like Vatika Technology Park, Vipul Technology Park, etc, have come up in the commercial segment. Retail has also developed post-2008, with a number of malls coming up, like Omaxe Wedding Mall, Raheja R Mall and JMD Galleria. The retail values are approximately Rs 9000 to Rs 10,000 per sq ft. Exit 11/12 covers Hero Honda Chowk, Sectors 9, 10 and Pataudi Road. Apart from a cooperative group housing society, which was operational since 2000 in Sector 9, there was hardly any residential development in this area. Still, the current residential values are nearly Rs 3,000 per sq ft.

To conclude, the expressway has not only made developed localities of Gurgaon more accessible, it has also facilitated development of new localities like Pataudi Road. According to S C Jaisimha, MD of AsiaPac International, “Master Plan 2021 has opened many sectors for development with 30-35 new sectors getting approval.

Thus, with the increase in supply, appreciation of values was not as high as was expected, despite huge development and better connectivity after completion of the expressway. However, ready-to-move-in options command higher prices (10-15%) than those which are under construction.” Most of the new development envisaged in Master Plan 2021 is on the Manesar stretch, currently called New Town Gurgaon, a locality which has been made accessible only due to construction of the Delhi-Gurgaon Expressway.

Source :- http://content.magicbricks.com/delhi-gurgaon-expressway-opening-new-areas-for-development/

Gurgaon Master Plan 2031 to drive investment returns

Delhi NCR

The recent approval of the Gurgaon Master Plan 2031 has called for many debates and discussions over its impact on the real estate market of the mega-city. Pramod Agarwal, ED of Microtek Infrastructure Pvt Ltd, talks to Shradha Goyal of MagicBricks.com Bureau and discusses the provisions under the plan and what the investors can look forward to:

What is the Master plan of Gurgaon 2031 all about?

The 2031 Master Plan of Gurgaon is based on the unused land which was meant for developing Special Economic Zones (SEZ). Under the plan, several pockets have been identified for developing residential, commercial and industrial zones in Gurgaon.

As per the new plan, which areas are expected to be included?

Several new sectors falling on the Dwarka Expressway such as Sectors 88, 88A, 88B, 88D, 95A, 95B and 99A are planned to be included in the city. Already, there is a gamut of projects coming up in the area and are expected to be completed in another five years. After that, there will not be much scope of further residential development. The demand too, is robust as these sectors are close to Delhi.

Will the plan be instrumental in pushing investment returns in Gurgaon?

We expect the property values in the developing sectors to double in the coming three years. Proximity to Delhi, completion of the 150mt wide Dwarka Expressway and the delivery of planned projects would result in high returns on investments. Also, the increased construction costs are constantly adding to the increasing property values. The coming three years will also see the construction costs doubling.

Sector 68A has been earmarked for LIG housing. Do you think the area allocated is sufficient to meet the needs? How will these be developed?

The land allotted for the development of Low-Income Group (LIG) homes is definitely not sufficient. As per the policy by Haryana Government, the developers would be providing LIG housing at a price of Rs 4,100 per sq ft. The construction quality would be maintained as per the standards, including facilities such as two-wheeler parking. Also, these homes would be allotted to the buyers as per the eligibility criterion that they should not own any other home in Haryana.

Source :- http://content.magicbricks.com/gurgaon-master-plan-2031-to-drive-investment-returns/?fromSite=toi&utm_source=toi&utm_medium=referral&utm_campaign=toi-mb-whitelabel-city-delhi-ncr

Property demand: Chennai, Gurgaon hot, Mumbai cold

Mumbai: The real estate market is sluggish in Mumbai, but, looking at the absorption rate, residential property is selling like hotcakes in other cities like Bangalore, Chennai and Gurgaon.

The absorption rate is the number of apartments sold in a month from the available inventory in a market. It is an indicator of the demand situation in a particular real estate market. For example during the calendar year 2011, Mumbai (including Navi Mumbai and Thane) saw 6,650 apartments sold each month against 9,092 in 2010, according to global bank JP Morgan. This means, the absorption rate fell 27 per cent.

Every property market has an inventory of apartments. If the absorption rate is high, the inventory gets exhausted quickly. With the absorption rate in Mumbai falling, it will take two years to sell the unsold inventory.

Property trends in five major cities are explained below:

Mumbai: JP Morgan expects prices to correct in Mumbai only when some new residential projects are launched. Currently, high prices are keeping buyers away. Over the past one year, residential prices in Mumbai have remained flat. In pockets like central Mumbai and North Mumbai, they have increased by 10 per cent. New project launches fell 50 per cent during the calendar year 2011.

Gurgaon: The residential absorption rate in Gurgaon rose 11 per cent in 2011. This is largely due to a high launch activity in the market. Property prices in the market rose 17 per cent during the year. Unsold inventory in the market remains at healthy nine months of average absorption. This means the demand for homes in Gurgaon is much higher than Mumbai.

Bangalore: The residential absorption rate in Bangalore grew 19 per cent in 2011. This was primarily driven by large affordable launches done by reputed developers. Price appreciation now seems to be catching up in Bangalore with completed/nearing completion projects witnessing 10-15 per cent appreciation over the last few months. New launches in Bangalore rose 56 per cent in 2011. Average property prices rose up to 24 per cent across key real estate pockets during the same period.

Chennai: The residential absorption rate in Chennai rose 37 per cent in 2011. High launch activity has resulted in increased unsold inventory in the market. Unsold inventory rose to15 from 10 months early last year. Average property prices rose 8 per cent to 30 per cent in pockets from Anna Nagar to Rajeev Gandhi Salai.

Noida: The residential absorption rate in Noida fell 31 per cent in 2011. In Greater Noida, it fell even further at 56 per cent. This indicates a sharp slump in demand due to a weak buyer sentiment given the recent political change that could impact project approvals/new launches. In Greater Noida, construction progress of launched projects has also slowed down in the market due to contraction of funds by banks/NBFCs. Average property prices in Noida rose 6 per cent.

Source :- http://profit.ndtv.com/news/corporates/article-property-demand-chennai-gurgaon-hot-mumbai-cold-301232

Gurgaon residential property investor update

Over the last one year, capital values rose by more than 30-35% in Gurgaon's residential sector. Developers are now going slow on execution of real estate projects, resulting in a drop in supply of residential apartments in most prime markets. Emerging residential areas are still not able to meet the huge housing demand.

Two key reasons for increasing rental and capital values for residential properties are:

 Because of rampant construction delays, the expected supply of residential properties announced in early 2009 has not been able to reach the market. Around 500,000 units that were scheduled for possession in key markets by end of 2011 are delayed by another year

- There has been an increase in lateral hiring by corporates. With job scenario improving all over the country, people have more to spend. This has resulted in good investment opportunities, and investor sentiments in the affordable and mid-income segment of Gurgaon's residential market have improved.


Hot Locations

Residential property prices on the upcoming southern peripheral road connecting to National Highway 8 have seen considerable appreciation over the past few months. This location holds great investment potential thanks to enhanced connectivity that NH8 provides to Manesar and Dwarka. In particular, residential properties along the Dwarka Expressway have attracted interest from the mid-income buyer group. As prices soar in upcoming locations of Gurgaon such as Golf Course Extension, Sectors 70 and Sector 78, buyers have been looking at these alternate locations.


The Downside

That said, not all residential projects rank equally from an ROI perspective. Whatever appreciation in capital values Gurgaon residential properties have seen does not seem as significant when seen in the light of factors like the higher interest rates on home loans. Nominal capital appreciation of a property may be as high as 25-30%, but the actual ROI after making adjustments for inflation and higher interest rates can be nil. There is a 75% chance of investing in a property that will not give investor any gains - and in some cases it may even result in a loss.

Gurgaon is expected to see a residential property supply explosion. There are 55,000 ready flats on the market today. We expect to have around 6000 ready flats by end of 2012, with an additional 65,000 by the end of 2014. Another 20,000 in 2015 will take the final tally to almost 150,000 by the end of 2015.

Out of the total supply, properties which offer locational advantages in terms of vicinity to airport and Metros connectivity will have better absorption. Strategic location and superior amenities will be the keys to profitable residential property investment in Gurgaon in the foreseeable future.

Long-term fundamentals

Gurgaon remains promising for office space, and there are good prospects for more major global players setting up operations here in near future. On the whole, this augurs well for the residential property market, more or less assuring relatively healthy absorption of residential space in the times to come.  The new infrastructure initiatives being undertaken by the Government will also play a crucial role for Gurgaon's residential and commercial property sectors.

Source :- http://www.moneycontrol.com/news/real-estate/gurgaon-residential-property-investor-update_682406.html

Why Gurgaon is a better property destination than Noida

Home sales rose across most major markets in the country between January and March 2013 compared to last quarter of 2012, thanks to new project launches at attractive prices and the discount schemes on offer. Expectations of further rate cuts on home loans and the impending revival of the economy is likely to further fuel demand for new homes.

If you are planning to buy a house around Delhi, Noida and Gurgaon must be high up on your list. The satellite cities are the most sought after destinations when it comes to the National Capital Region.

Gurgaon:

Often called the 'Millennium City', Gurgaon saw demand for new homes slowing for the third consecutive quarter, according to a Bank of America Merrill Lynch report. However, the slowdown in demand had no effect on prices, which rose by an average 4.5 per cent across projects over the three-month period, the report says.

Fewer project launches during the quarter, lower inventory and rising speculation among investors led to a strengthening of prices.

Real estate biggies like DLF and Unitech, which have executed large projects in Gurgaon, launched fewer apartments to focus on execution and inventory clearance. The absorption rate in Gurgaon is slowing but is still the highest in the country among tier I cities indicating robustness in the market, Bank of America adds.

Gurgaon has the lowest unsold inventory of unsold flats in the country, the report says.

According to Bank of America, Gurgaon will continue to show strength on the back of rising number of end-users and investors.

"Prices of ongoing residential projects in Gurgaon continued to move northwards despite weak macro indicators and slowing demand trends," the report states.

Noida:

Noida also witnessed a slowdown in new launches in the first quarter of 2013 but, unlike Gurgaon, demand remained steady.

Noida is the most affordable city among tier I cities, but its absorption rate has remained subdued and unsold inventory continues to rise since year 2010, Bank of America Merrill Lynch says.

Home prices have remained depressed in Noida because of a large number of project launches, poor execution and tepid price appreciation. As a result, investors have fled the market.

Bank of America Merrill Lynch said the timely execution of projects will be the differentiating factor for Noida in the near future.

So, if you are an end user looking for affordable housing, Noida is a suitable destination. For those with deeper pockets, especially investors looking to make a quick buck, Gurgaon is the way to go.

Source :- http://profit.ndtv.com/news/property/article-why-gurgaon-is-a-better-property-destination-than-noida-320498