Tags:
Journalism of Courage
From complete obscurity to one of the most highly-hyped north Indian growth corridor,to overheating and back to the top slot in Indias most lucrative residential real estate investment hotspots 8211; when it comes to market status updates,Gurgaon has its own significance.
As is invariably the case in new sectors,residential property demand at Gurgaon began on a strong and promising note. However,between 2007-08,it fell prey to speculators who purchased properties with the sole intention of making quick gains. This led to overheating of property prices in Gurgaon,and the market began correcting sharply when a series of severe stock market fluctuations took place. Investors into Gurgaons residential real estate market found themselves facing an unexpected lack of ready cash and began to sell their holdings. Prices corrected to the tune of 15 to 20 percent in most projects. That said,the inherent strength of Gurgaons property market revealed itself during the recent economic recession and concurrent real estate market slowdown. The demand for quality residential spaces had dropped primarily because of a lack of supply of appropriately priced mid-income housing,since most projects during the boom period focused squarely on the high-income segment.
THE DAWN OF REASON
During the recession,there was a marked slowdown in sales for high-priced units at Gurgaon,but the degree of drop was no more and no less than at par with that witnessed in the rest of the country. This was a key phase,in which developers had to take decisions that would have an immediate and long-term effect on their business viability. Fortunately,they aligned their business models to the new demand dynamics and finally started catering to the middle income segment by launching affordable and mid-sized apartments. In the main residential areas and projects of Gurgaon,such as DLF Phase I-V,Golf Course Road,MG Road National Highway 8,Nirvana Country,Sushant Lok,Sohna Road,etc. property rates have again started picking up.
APPRECIATION POTENTIAL
With the return of demand and considering the track record of overheating 8211; there are obviously questions being asked about the rationality of property rates. The fact is that while rates would definitely appear higher than those in some of the smaller cities,one needs to factor in the degree of overall development and the demand dynamics prevalent in this burgeoning north Indian business hub.
The upshot 8211; Gurgaon continues to be an excellent long-term real estate investment. The market there is growing at a rational and sustainable rate,and this is a healthy sign. Over-enthusiastic projections in terms of property investment returns have ceased. As is the case with all other cities at this point in time,actual returns at Gurgaon are still linked to overall economic performance and growth.
The writer is CEO Operations,Jones Lang LaSalle Meghraj
