NCR witnesses subdued activity in residential market in H1-2013

Residential markets across the national capital region (NCR) observed subdued activity in the first half of 2013 as compared to the previous review period, according to the CBRE’s latest report on the residential sector.

“The NCR’s residential sector has witnessed lower levels of activity primarily due to inflated prices. Going forward this will continue to dampen demand levels, particularly in the premium markets of Delhi and Gurgaon,” said Anshuman Magazine, chairman and managing director of CBRE, South Asia Pvt Ltd.

“Though the market is expected to witness developer focus on clearing existing inventory levels, launches by prominent developers are expected during the second half of the year – primarily in Gurgaon. The RBI’s latest ruling on disbursement of loans on special schemes, however, will further impact the residential market here,” Magazine said.

The residential market of Delhi witnessed stagnancy –concentrated in both the mid-end or high-end as well as premium housing projects. Buyer interest remained largely focused upon cost effective suburban markets, with prime areas witnessing no new launches during the first half of 2013.

The report said that capital values across most micro-markets of Delhi witnessed a decline owing to restrained demand levels, besides a cautious buyer sentiment. “Developers delayed the launch of new projects, as they focussed on clearing existing vacancy levels. While the prevalent market sentiment was one of caution, marginal price appreciation was witnessed in specific projects in Gurgaon on account of their relative affordability, developer profile and location,” it said.

Developer focus remained largely upon luxury housing, attracted by the higher returns offered by this niche segment, particularly in a few central and peripheral locations of the city.

However, the report added, “There was supply addition in the mid-end/high-end segment as well, but mostly along the Dwarka Expressway and the New Gurgaon area. Across most of these locations, developers continued to offer incentives – such as flexible payment schemes, discounts and free merchandise – to boost sales. Furthermore, Noida Extension and Yamuna Expressway also witnessed quite a few project launches; and continued to hold their ground as low cost emerging micro-markets offering affordable investment options for home buyers in the region.”