New Delhi residential launches up 7% to 2,045 units in Q1

Luxury launches accounted for 54% of all the launches.

New residential launches in Delhi NCR grew 7% y-o-y to 2,045 units in the first quarter of 2022. High-rises were launched in micro-markets including Shivaji Marg in west Delhi and Dwarka Expressway. 

According to Cushman and Wakefield, DLF Phase 1 & 2 in Gurugram saw the launch of independent floors, a category that has seen welcome response from buyers. 

Here’s more from Cushman and Wakefield:

New launches during the quarter were in the high-end and luxury segments with the latter accounting for a 54% share of the quarterly launches. All the launches were by established and renowned developers with one of them having participation from Singapore’s sovereign wealth fund, GIC. Gurugram constituted a 55% share in the unit launches, while Delhi accounted for the rest. 

Robust launch activity was noted under the Haryana government’s Affordable Housing Scheme with 3,145 unit launches in Q1 in comparison to 4,333 units launched during the whole of last year. Rates for apartments under this scheme have been increased by INR 200 per sq ft for the first time since launch of this scheme in 2013, on account of the rising input costs. Also, 75% of the payment for projects under this scheme has been linked to the construction status of the project instead of being time-bound payments earlier. 

Changes in Haryana building by-laws on the cards 

Amendments in building by-laws are being contemplated by the Haryana government with an objective to incorporate additional safety norms for projects. Additionally, the state government is also working on a policy to conduct structural audits of high-rises for which suggestions and feedback have been sought from various stakeholders. Stringent checks and independent audits will ensure quality of construction for projects as well as safety of residents even in case of inhabited buildings. 

Capital values appreciating for projects and micro-markets with high demand 

Select projects with strong demand are seeing an increase in capital prices, especially in key micro-markets of the city. An uptick in sales activity is contributing to this rise which is expected to sustain in the near-term. Offsetting the steep rise in input and labour costs has been another reason that is compelling developers to increase prices and pass some of the burden to customers. Prices are likely to be on an upward trajectory in the coming quarters due to a sustained pressure of higher input costs due to inflation. 

In a separate move, Delhi government is planning to increase circle rates in some of the posh areas of the city, while simultaneously reducing the rates in localities where the rates are high. This may lead to a 30% increase in property prices in select high-end localities of Delhi once the new circle rates are approved by the government. However, the revision in most other areas is likely to be nominal. 

Rental rates remained largely range-bound during the quarter for both mid and high-end segments across submarkets. The demand for rental properties is likely to increase as more workforce returns to work in offices. 

Construction pace on upcoming projects remained healthy especially in the case of larger developers across micro-markets in both Gurugram and Noida, while some other project sites continued to witness muted execution during the quarter.