Gurugram Realty Is Getting Affordable. Are You Game?

Overvalued properties dragged the Gurugram property market down for a good length of time—data available with PropTiger.com show home sales numbers kept declining year after year even as developers tried to hard-sell by sweetening offers. At the same time, they put all their plans of launching any new projects in this commercial-hit market on the backburner. Their efforts are seen yielding results now.

According to PropTiger.com’s Realty Decoded, a quarter analysis of India’s nine major residential markets, home sales in Gurugram increased 10 per cent in the March quarter of the financial year 2018-19 (FY19), year-on-year. The Millennium City was second only to Hyderabad where home sales increased 26 per cent during the quarter.

During the same period, new launch numbers have also gone up five per cent—4,929 units were launched in the city in the March quarter as against 4,705 units launched in the corresponding month of the previous financial year. As against 5,220 units in Q4’18, developers sold 5,764 units in the same quarter in FY19. Gurugram, in fact, was among the three cities where new launches saw a marginal increase during the quarter.

In the past one year, rates have also declined four per cent, hitting an average Rs 4,950-per-square-foot bracket. This is the sharpest fall in prices seen by any city in the past one year. Noida and Ahmedabad were the only two cities where prices declined in this period, by a per cent only.

This property market still has a great deal of inventory, and realtors here would need at least 32 months to be able to sell the existing stock here at the current sales velocity.  

Affordable twist

Let its distinction of being an unaffordable market not mislead you—data show otherwise. According to the report, over one-third of all units sold in Gurugram during the quarter were in the Rs 25-50-lakh price bracket. A similar trend was seen in Ahmedabad, a realty hotspot primarily known for its affordability.  

Also read: Will Gurgaon Realty See A Turn Of Luck In 2019?

Aging inventory

The unsold housing stock in this city is, however, getting old. About 58 per cent of the inventory stock here is aged over three years. Its affordable peer in the national capital region Noida is worse off—76 per cent of the housing inventory is three-year-old. This could also be the reason why prices have seen some correction here in the recent past. In Hyderabad, for example, which has the best inventory profile among the nine cities, property rates have increased 14 per cent in the past one year.