Real Estate Developments in Delhi

The real estate market is in overdrive in the city, in its run up to the Commonwealth Games in 2010. With a budget size of Rs. 9000 crore for 2007-2008, the Government is playing an aggressive role in developing the right infrastructure. The city's requirements for accommodation will push up rates of capital as well as rentals.

The growing number of expatriates and the demand from the diplomats in the city is pushing up rentals to as high as Rs. 114 per sq. ft in neighborhoods like Vasant Vihar. Bungalows average between Rs. 2 lakhs to Rs. 6 lakhs rent per month, depending on the locality.

In the last 12 months, rentals have been rising sharply with the demolition and sealing drives on commercial establishments in the city. In fact, rates in Delhi surpassed Mumbai, with 40% escalation in Connaught Place, and 30% in the rest of the city.

With the advent of large format retailing, the demand for larger commercial spaces will create further appreciation in commercial property rates. Reliance Retail acquired commercial property worth Rs. 980 crore in Vikas Puri, Rohini and Dwarka, with a total area of 5 lakh ft., causing ripples in the property market.

Delhi's residential property market is driven more by investors than by end-users was the opinion most experts in the business shared till the Master Plan 2021 was finally notified in February 2007. However, the increase in the FAR to 350 housing units on a plot of 175 to 200 sq. metres, permission for taller structures of upto 15 metres, and freeing up of 27,000 hectares of land in Dwarka, Najafgarh, Asola and Narela to private developers will see heightened activity in the residential property segment as well.

Appreciation

New colonies developing on the periphery of the original city limits drove city planners to strengthen infrastructure, causing real estate prices to shoot up. The Delhi Metro and the series of flyovers and under-passes criss-crossing the city on arterial roads has shrunk distances and far-flung suburbs like Jasola and Dwarka have woken up to the real estate boom, commanding rates of Rs.4 -5000 per sq.ft.

In Dwarka, a further increase of 15-20 % is expected in 2007, especially in sectors 2, 6, 7, 9, 10, 11, 12, 13 and 14. East Delhi, adjoining Noida, which will get connected by 2009, property prices along the Metro, especially in sectors that will house stations -- 15, 16, 18, 32, the botanical garden and the golf course a rise of 20-25 per cent can be expected where prices are currently at Rs 4,000-5,000 per sq ft. Sectors 19, 26, 39, 40, 41, 47, 50, 51, 61 and 62 are also expected to gain. Once the Metro reaches Noida, the connecting corridors will see a rise of about 25-30 per cent

Capital values in Civil Lines, Ashok Vihar and Model Town have touched Rs. 80,000 to Rs. 1.20 lakh per square yard. Apartments are now priced at Rs. 3,000 to 4,000 per sq. ft. In Punjabi Bagh, Rajourie Garden and Janakpuri, rates per sq. yard have appreciated from Rs. 35-50,000 to Rs. 80,000 to one lakh. Apartments registered a jump of 100 to 150% in the last one year

In East Delhi, prices of 2-room apartments have escalated from Rs. 20 -40 lakh to Rs. 40-75 lakh. The countdown to the Commonwealth games will see further dramatic changes in this part of Delhi.

The squeeze in the commercial property market has led to substantial gains for landlords and lessors across Delhi, pushing up rentals to unimaginable levels of Rs.100 to 150 per sq. ft.

NRI Real Estate Trends

As private developers will play a more active role in the development of residential apartments in the Delhi Metropolitan Area, NRIs could explore investment options in these projects. The relaxed norms for construction within the city, with respect to floor area ratio and height of buildings will trigger more ambitious projects in hitherto undeveloped sections of Delhi.

DLF, Parsvnath and Ansals have luxury projects coming up in Delhi which NRIs could take a look at. The NRI city by Omaxe in the NCR is a self-contained township with amenities and facilities that match international standards.

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