DELHI: Dwarka-Gurgaon Expressway, also known as the Northern Peripheral Expressway, has been one of the hottest real estate investment destinations in Delhi/NCR with the vast potential for a robust growth.
For the past couple of years, with the rise in demand, we have seen that the prices in Dwarka-Gurgaon Expressway have almost tripled – from Rs 2,250 per sq ft to Rs 6,250 per sq ft. Many projects in this area have their launch prices between Rs 7,000 per sq ft and Rs 10,000 per sq ft.
Top realty players such as Chintels India Ltd, Sobha Developers, BPTP, Puri Construction, ATS, Antriksh, Rahejas, MGF EMAAR, Bestech, Uppal Housing, Indiabulls, Brisk and Mahindra Earth Infrastructure have launched their projects in the area.
Dwarka-Gurgaon Expressway and concerns
Dwarka-Gurgaon Expressway has been embroiled in lot of issues, due to which it has been delayed. With many of the issues being sorted out, it will take another 12-18 months to get the expressway completed.
The completion deadline for expressway for Oct 2013 may now be extended by another 18 months. Thus, 150 mt wide and 18 km long Dwarka-Gurgaon Expressway is likely to be completed in the next 2-3 years. Once completed, the expressway will provide faster access to the airport and connect to the 100 mt wide road proposed in the new master plan.
The new link will connect Dwarka with Gurgaon by an eight-lane (150 mt wide) expressway starting from Dwarka and connecting Palam Vihar and the planned SEZs in Gurgaon to join the NH-8. This will result into traffic burden being offloaded off the existing links: NH-8, MG road and Old Delhi road in Gurgaon.
The economic slowdown and recessionary sentiment have resulted into property prices being stagnant or having seen a slight correction in the recent past. The reductions in prices are being provided as festival discount offers or freebies with the properties. Big cities have seen correction in prices, such as Hyderabad (4.55 per cent) followed by Kolkata (4.06per cent) and Chennai (2.26 per cent). While property prices in the National Capital Region (Delhi and adjoining areas) fell by 1.49 per cent in the quarter, Bangalore saw a decline of 0.92 per cent, Pune 0.90 per cent and Mumbai 0.45 per cent. (Source: Economic Times, 2 Sept.’13)
A 1,200 sq ft apartment, that was priced at around Rs 86 lakh, seven months back, is now selling at Rs 77 lakh. This festive season of Diwali will also see new launches at lower prices; coupled with innovative payment plans.
Strains in the Market
Real estate market in the whole, and Dwarka-Gurgaon stretch in particular have been seeing some strains in the recent months with short-term real estate investors defaulting on their payments to developers. Now, the key question is what short-term real estate investment means and what is leading short-term investors to default? Short-term real estate investors are a source of quick funds for housing projects. By paying 20-30 per cent as a down payment on say 15-80 apartments (on a lower scale), they provide immediate funding to developers. Developers, on the other end, are able to provide them with discounted/lucrative price offers. These short-term real estate investors then sell these to the buyers/investors in 3-6 months period.
As per various property consultants and real estate broker networks, short-term investors have cornered 50-60 per cent of newly-built homes on the Dwarka-Manesar Expressway in Gurgaon and about a third of homes coming up in Noida-Greater Noida Expressway. However, due to economic slowdown and rising cost of living, regular home buyers are not venturing into the waters as of now; that is resulting in unsold inventory with short-term real estate investors.