The big boom--Jan 13, 2007

The year 2006 started on a good note, thanks to the government allowing 100 per cent FDI in the real estate segment and ended on an equally good one as major construction giants announced a horde of projects in the capital and the NCR… Rai Umraopati Ray gives you a sneak peek into the realty developments of the region
A booming economy coupled with liberal government policies has totally transformed the face of the Indian real estate industry, making the graph escalate further year-after-year. The year 2006 was certainly no exception.
Following the huge success and appreciation of its first research report done on the Chandigarh real estate market, PropertyVertical.com has recently come up with its second research report on real estate in India, covering ‘Residential and Commercial Upcoming Projects’ in Delhi and the NCR. According to the report, the Commonwealth Games 2010, to be held in East Delhi, are leading to a great deal of action in infrastructure development, hospitality as well as in the retail segment. Indirapuram, Dwarka and Kaushmbi have witnessed a lot of development in the wake of the upcoming event.
Areas like Kundli and Manesar are buzzing with activity. While Kundli is witnessing the rise in residential projects with some big developers like TDI tapping the potential, IMT Manesar has become the favoured haunt for the investors, corporations and developers. The EROS Group is setting up a corporate park in IMT Manesar on an area of approximately 5 lakh sq. ft. Property rates in the Kundli and Manesar region are expected to move with the same pace with gradual momentum over the next five years. The recent announcement by the Haryana state government to extend Metro services to Kundli will certainly make the area one of the most sought-after destinations for real estate developers and investors. With the proposed Rajiv Gandhi Education city in Kundli (on the Delhi-Haryana border), the area has the potential of becoming an education hub.
According to the Associated Chambers of Commerce and Industry of India (ASSOCHAM) the real estate market will grow to US $60 billion by 2010 from the present figure of US $16 billion. In 2006-07, FDI is expected to be US$8 billion, with real estate having a share of 26.5 per cent. This share is expected to increase by at least 10 per cent (with particular demand for office space for IT/ITES sectors) by March owing to the entry of global real-estate players. A study on remittances conducted by the Reserve Bank of India (RBI) reveals that in the Financial Year 2006, of the total US$ 11.04 billion invested by the diaspora in various instruments, US$ 2.46 billion (Rs 11,070 crore) went into buying property.
There is no questioning the fact that the land saturation in the capital led to the development of suburban locations like Gurgaon and Noida, but nobody could have predicted that the development would take the form of a gigantic boom.
Keeping pace with the intense competition, builders are trying out more inventive methods to be different and customised. For instance, specialised malls have become the order of the day. Gurgaon will soon have an auto mall catering to automobiles in addition to a wedding mall by Omaxe, which will also house a huge banquet hall. In order to position their products and build brand value, malls are now coming up with 5-star hotels and service apartments which showcase conference halls, swimming pools, banquet halls and multiplex all under one roof. Around eight Secial Economic Zones (SEZs) are coming up in Gurgaon. With SEZs having the mandate to develop residential zones, the overall infrastructural quality in their vicinities is bound to be of a high calibre.
Be it the upcoming Commonwealth Wealth Games or the recently conducted sealing drive, everything today seems to make an impact on the real estate industry. There is simply no stopping rising prices as the rush of residential and commercial projects continue their surge ahead.
According to the recent research conducted by PropertyVertical.com, the maximum numbers of commercial projects are coming up in Delhi whereas Gaziabad is attracting more residential developers. Tier II and Tier III cities (non-metros, towns, and semi-urban areas) are witnessing a preference over Tier I cities by real estate investors.
Developers like DLF, Ansal, Omaxe Group, Unitech Group, TDI Group and others are now foraying into Tier II and III towns like Manesar, Kundli and Rudrapur and the suburban areas of Gaziabad, Greater Noida, Faridabad, etc. The year 2007 will have the maximum number of commercial projects completed with possession transferred to owners. The year 2008 will have the maximum number of residential projects completed, while the majority of upcoming residential projects will be completed in the coming year and in 2009. The commercial real estate market is approaching its peak whereas the residential segment is very robust. Keeping these conditions in view, overseas investors will continue to invest in the real estate for a few more years, says the report. The report further predicts that property rates in the new sectors of Faridabad are expected to appreciate and that there will be little scope for appreciation in prime land rates in Noida, Gurgaon and Greater Noida. The research goes on to state that even though the Sonepat belt is picking up pace, the market is expected to be more aggressive with land rates poised to appreciate to Rs. 25,000 - Rs. 30,000 per square yard in the next five years.Over the last year, the Delhi NCR region has witnessed a great number of residential projects being constructed. This pace of activity is not likely to decrease in the next 24-30 months, says the report. With the Reserve Bank of India allowing NRIs to remit the proceeds from the sale of immovable property in India, thus lifting the 10 year lock-up, the future certainly looks bright for builders as well as the people of Delhi and the NCR.