What to expect from New Delhi’s upcoming home launches

There will be up to 4,000 new units up for grabs in the year ahead.

Developers kept a restraint on new launch activity during the quarter that was marked by several restrictions amidst the second COVID wave, says Cushman & Wakefield. Delhi NCR recorded 652 unit launches by developers with majority being in Noida Expressway followed by Sector 92, Gurugram. All unit launches in Q2 were in the mid segment category of homes. 

“Launches declined by 66% on q-o-q comparison with limited focus on launching new projects amidst the resurgence of COVID. However, developers are firming up plans to launch close to 4,000 units in the year ahead with Noida Expressway, Golf Course Extension Road and Dwarka Expressway being active micro-markets in focus. Bengaluru-based Prestige Group is also planning to mark its foray in the city with an upcoming project in a joint venture model.”

Here’s more from Cushman & Wakefield:

Delhi NCR also saw the launch of 820 units in Sector 81, Gurugram under the Haryana Affordable Housing Scheme as developers see both demand and a policy impetus in this area. However, the pace of launches in this scheme is now dwindling after close to 7,400 launches in the last year. Welcome response was witnessed for low-rise independent floors launched during the quarter by DLF where demand surpassed supply of units by the developer. A similar format low-rise project is planned to be launched in the coming quarter to encash on the market demand for this housing format. 

Infact, several developers have applied for license under the Haryana government’s Deen Dayal Jan Awas Yojna, which allows developers to construct independent floors up to four floors. This will be mutually beneficial for both buyers who will be offered a lower ticket size and developers who can monetize such projects faster. Buyer interest for plots also remained high despite the limited inventory for this format, especially in Gurugram. 

Robust activity on the policy front highlighted Q2 2021 

The Draft Master Plan for Delhi – 2041 was introduced by the Delhi Development Authority, inviting suggestions and objections from the public. The fourth master plan for the capital city, providing a strategic framework for the growth of Delhi with a 20-year horizon, aims to address the problem of housing shortage for the increasing local and migrant population as one of its objectives. 

Serious buyers continued to be offered incentives 

Capital prices remained largely stable, though developers continued to offer several incentives to sweeten the deals for serious buyers to induce sales. These included inaugural discounts for new launches, limited period cash discounts, flexibility in payment plans with relaxed milestones. Such incentives aim at bringing down the overall ticket size for a property and benefit buyers. Such flexibility combined with the all-time low interest rates only make this an opportune time for property purchase. Sales momentum which took a hit during the second wave is likely to improve in the year ahead as COVID has prompted a section of buyers to upgrade to larger unit configurations and home ownership is being viewed more favorably. 

Rental rates remained stable after the 4 – 5% softening witnessed during Q1 across all submarkets for both mid and high-end segments. Demand remained subdued due to the prolonged remote working arrangement in several organizations. Increasing vaccination is expected to pave the way for more people coming back from their hometowns leading to increased uptake for rental properties. The mass exodus by migrant construction workers resulting in a huge disruption of work seen in the first wave was controlled to some extent by resourceful developers who provided accommodation and healthcare support to the workers. This lent continuity to work, with a reduced impact on the overall construction pace. However, completion timelines for most of the under-construction projects in Delhi NCR are likely to be extended.