Housing demand in Delhi NCR has seen an upward shift in Q4 2021, and the trend might continue so with strong end-user interest bolstered by Government efforts and incentives from developers. The preference for spacious homes and better amenities will also play a crucial role in amplifying sales and, thereby the property prices.
The COVID-19 pandemic has redefined the housing market. There has been a noticeable shift in people’s preferences from renting to buying residential developments. In Delhi NCR, the market has benefitted significantly from the change due to several factors. For instance, during the first phase of the pandemic, there has been severe wealth erosion across investment classes, including gold, stocks, and mutual funds. However, the real estate market in most metro cities, particularly NCR, displayed resilience after a fleeting setback. Also, in the wake of the pandemic, a large number of people who leased apartments were mistreated by housing societies, which coerced many to consider home purchases. The hiked demand also had a rub-off effect on the property prices.
99acres Insite Report Oct-Dec 2021 highlights that record-low home loan interest rates, altered preferences and new projects drove the homebuying trend across Delhi NCR. However, as ready homes remained the preferred choice, property values in the resale market grew by 5-10 percent QoQ.
Improved market sentiment
Residential real estate in Delhi NCR is likely to expand in the next 2-3 years. The segment was at its peak in 2019 after the reforms like Demonetisation and the introduction of the Goods and Services Tax (GST) and the Real Estate (Regulation and Development) Act (RERA) 2016. However, the COVID-19 pandemic halted the growth temporarily. While the setback was grave post the first wave as the sector was still trying to find solutions to the unprecedented crisis, the impact felt after the second wave was comparatively meek. The realty industry was well-equipped to deal with the crisis, and thus, the market observed a sharp V-shaped recovery. The steady growth and altered market dynamics reflect that the growth trajectory might continue in Delhi NCR in 2022.
Factors driving the trend
The receding impact of the pandemic, improving economic situation, and the low home loan interest is expected to bode well for buyers and developers. Moreover, Delhi-NCR has experienced massive commercial development in the last few quarters. Economic corridors, Special
Economic Zones (SEZs), startups and a rise in entrepreneurial culture have driven the demand for real estate assets in the region. Further, working professionals today are buying quality homes as an expression of their opulent lifestyles, as well as a future investment. Large open spaces, verdant greenery, and modern amenities in well-developed localities are attracting them and have become the driving force behind the growth. As a result of this growth momentum, the Delhi NCR property market is likely to go north in 2022.
According to Mudassir Zaidi, Executive Director (North), Knight Frank India, the momentum in the residential property market seen in H2 2021 seems to be continuing into the New Year. Correspondingly, the demand dynamics are also driving the price behaviour in the market. Spacious developments, with more open spaces, are seeing much higher demand than others, and therefore the resultant prices increase has been steeper. The trust deficit of the last few years is making buyers prefer low gestation period projects like plots and low-rise floors. The price increases in plots have been steep from the lows of 2020, followed by the increases in the price of floors. The high-rise apartment category has seen muted price increases except for in-demand luxury projects by reputed developers.
Overall, property investment in Delhi NCR has benefitted over the past few years due to its ability to endure and perform well in declining market conditions caused by the pandemic. It will gather more pace, and positive results would be noticeable amid robust economic recovery. Hence, the year 2022 is anticipated to be a promising year for the real estate sector in NCR. However, the industry experts predict that prices may only see a single-digit rise as inventory level is expected to stabilise in the short term.