NCR and MMR: Differences between two realty hubs
Real estate in India is dominated by the markets in Delhi and NCR (National Capital Region) and Mumbai. NCR and Mumbai Metropolitan Region (MMR) contributes 60% to the Indian real estate. Although increased urbanisation has changed the realty scenario in cities like Hyderabad, Bangalore, Chennai and other tier II cities as well, these two cities continue to consist the lion’s share in the realty market.
NCR and MMR
NCR mainly comprises of Delhi, Gurgaon, Noida, Faridabad and Ghaziabad. However, it is expanding rapidly and satellite towns like Panipat, Rewari and Sonepat are very much part of the NCR now. National Capital Territory (NCT) of Delhi and New Delhi are the nucleus of NCR, having the largest concentration of population in the region.
MMR comprises of Mumbai, Navi Mumbai, Thane and Powai. Places like Kharghar and Panvel are coming in to the orbit of MMR. Unlike NCR, the MMR areas are being governed by a single civic authority – Mumbai Metropolitan Area Development Authority (MMRDA).
Real estate in NCR and MMR
NCR and MMR continues to rule the real estate market in India due to one basic reason – it offers high return on property investments. Property prices have appreciated by more than 100% in certain places of the cities since 2000. Population continue to rise in both cities and there have been more number of new launches in the two cities than in other city of India. Mumbai and Delhi attracts huge foreign capital and remain hotbed of both residential and commercial spaces.
In case of NCR, Sohna Road, Golf Course Road, Noida Extension and Dwarka Expressway have been the best performers in the residential sector in the past year. In case of MMR, Andheri East, Bandra West, Bhayandar, Bhandup are the areas which have witnessed sharp rise in property prices in the past quarters.
NCR vs MMR: difference between the realty giants
Though counted as the two giants of Indian real estate, NCR and MMR differs from each other to a considerable extent as many key aspects of the two cities are different from the other.
(1) In comparison to MMR, NCR real estate market is more investor driven. It means that the number of end users are more in MMR than in NCR. As investors are more attracted to NCR, they look for high returns in quick time, which leads to NCR realty being more driven by speculations than MMR real estate.
In 2012, home sales dropped considerably in both NCR and MMR; about an average of 30%. However, it did not prevent prices to go up continuously. The prices of property in Delhi -NCR increased more than that in Mumbai and its adjoining areas. There has been a 14% rise in prices of NCR properties, as contrasted to about 4.1% price rise in MMR.
(2) The property prices are higher in MMR as compared to NCR. Only Gurgaon in NCR has the same entry level price as Mumbai. In Mumbai, no property is available under Rs 1 crore. However, in parts of Delhi NCR, one can buy property at a rate lower rate of Rs 40-60 lakh. As a result of unreal price hike over the last decade in Mumbai, the number of unsold houses is more than anywhere else in the country. MMR bears the burden of around 80,000 unsold units as the buyer feels that property prices have gone out of their reach.
In Delhi-NCR, there has been an average price hike of 25% in the last year; which is driving investors to buy properties worth Rs 40-60 lakh. On the other hand, Mumbai real estate has witnessed constant rise in prices at an exorbitant rate despite falling sales. In Mumbai, average value of flats shot up to Rs 2.6 crore in mid 2012. It shows a 20% increase than March, 2011. Apartments in localities like Colaba, Mulund, Dahisar and Mankhurd have prices up to an average of Rs 17,536 per sq ft.
(3) Scarcity of land is the main reason that the real estate development taken place in Mumbai is vertical in nature. In comparison to Mumbai, Delhi-NCR has less scarcity of land and developers can still buy farmhouses and land plots at a reasonable rate around NCR. While Mumbai skyline is a symbol of high rises, high rises are blooming in Delhi quite late than the financial capital of India. Added to the 30 skyscrapers above the height of 100 meters, Brihanmumbai Municipal Corporation (BMC) has approved 78 skyscrapers till June, 2012.
(4) Delhi-NCR enjoys more developed infrastructure than Mumbai. The expressways like Noida Expressway and Dwarka Expressway have transformed the infrastructure scenario in NCR. Also, the rapid transit system has improved by leaps and bounds in NCR with metro rail coming up. Infrastructure development has pushed Delhi-NCR realty to an all new level. However, compared to NCR, MMR still has to depend largely on the robust transport system of local trains which remain the heartline of the city.
(5) The scale and volume of luxury segments in Delhi and Mumbai differ a lot from each other. Mumbai continue to come up with more luxury and super luxury apartments than Delhi. Re-development and slum rehabilitation schemes in South Mumbai have boosted the residential sector of Mumbai and South and Central Mumbai continue to be the hotbed of luxury development. There has been a significant increase in 4 and 5 BHK supply in the luxury segment.
In NCR, luxury apartments are mostly concentrated in Noida and Gurgaon. While the premium apartment projects in Gurgaon worth in the range of Rs 8,500 to Rs 16,000 per sq ft, in Mumbai the segment is priced at around Rs 30,000 per sq ft.
