NCR Realty – Growth vs Development
Contradicting the fact that real estate growth and development goes hand in hand, the real estate in NCR has seen enormous growth in the sector in the last few years, but the development remains under achieved in many pockets of the NCR. Lack of planning and poor infrastructure are the main obstacles for the development in these parts.
NCR expansion
Neither the expansion of the NCR has helped in decongesting Delhi nor has the inclusion of surrounding districts into NCR proved fruitful to the districts such as Sonipat, Panipat, Baghpat and Bulandshahr. However, Gurgaon, Noida and Ghaziabad are exceptional.
Along with the recent inclusion of three more districts, Mahendragarh and Bhiwani (both in Haryana) and Bharatpur (Rajasthan), the total number of districts in the NCR has summed up to 19 with a 34 percent increase in its total land area. Further, Haryana is trying to include Jind and Karnal in NCR, while UP wants to include Mathura-Vrindavan in NCR.
The surrounding states are excited to include their cities under NCR because they believe that the ‘NCR tag’ would fetch them easy funding and it would also help in dispersal of economic activities and reduce pressure on Delhi’s health, educational and economic infrastructure. But sadly, except for Noida, Ghaziabad and Gurgaon, this concept of ‘fast-track development of NCR districts’ has only remained in theory. Even after getting cheaper funds, the districts such as Meerut, Hapur, Bulandshahr and Baghpat failed to witness proper infrastructure and growth of required extent.
The original idea of development seems to have got lost in the race, alleged Santhosh Kumar, CEO- Operations, Jones Lang LaSalle India. At such a slow pace of development, even the real estate market has failed to capture a sustained level of interest from investors and end users, he added.
Property prices almost stagnant
Prices of properties in Sonipat–Panipat and Kundli belt have remained almost constant from the past two years at around Rs 3000 per sq ft, while the price was around Rs 1,000-1,500 per sq ft before the inclusion. Baghpat and few other districts did not witness enough hike in the property prices even after being listed under the NCR districts. However, Meerut observed some appreciation in the capital value of properties, from Rs 1000 per sq ft to around Rs 3000 per sq ft, following which many developers entered the market.
The districts of Haryana witnessed significant hike in property prices and tremendous development in terms of real estate and infrastructure. Several leading realty players have forayed the market and are coming up with numerous projects.
Future of new NCR districts?
However, it would not be right to decide whether the newly added districts- Bhiwani, Mahendragarh and Bharatpur- would be able to take off like Gurgaon or Noida, or lag behind like the other districts.
It has been observed that has been exhibiting growth signs and real estate analysts estimate that they would see a 15 percent hike in property prices in the next three years. Based on this estimate, Mahendragarh, located at 70 km from the nation’s capital, would witness a rise in rates from the present Rs 2,000 to Rs 3,000 per sq ft. The prices of properties in Bharatpur, located at 200 km from Delhi, would rise over Rs 1,500 per sq ft while the properties in Bhiwani would rise from Rs 3,270 to Rs 4,860 per sq ft.
However, these areas may not see a huge appreciation in their real estate prices, as it happened in the early inclusions of areas like Gurgaon, Noida and Faridabad, which are in close proximity to Delhi.
