NCR Realty: A Tale of Two Cities And What Divides Them

If price correction was the prime criterion based on which property seekers took decisions, the fact that rates went downwards in the two primary markets of the National Capital Region (NCR) — Gurugram and Noida — would warm the cockles of their heart. Data available with PropTiger.com show that while Gurugram property prices depreciated 10 per cent in the past one year, prices reduced by over two per cent in Noida. However, sales registered in the two property markets portrayed an entirely different picture. Despite the price correction, home sales in Noida depreciated 56 per cent in the April-June quarter of FY20. In contrast, sales activity picked up and saw a 32 per cent increase in Gurugram. Also, when compared to Noida’s inventory stock of 63,637 units and inventory overhang of 41 months, Gurugram is better placed with only 46,426 units in stock and 28 months of overhang.

Source: PropTiger DatalabsNote: Data for Apr-June quarter FY20; compared with the data for the Apr-June quarter FY19

The above stats leads to the question- what might have led to Gurugram, an expensive property market (average rate per square foot is Rs 4,950) perform better than the affordable Noida (average rate per square foot is Rs 3,900) ?

Noida’s image issues may have a lot to do with its turn of luck of this property market-once perceived as the poster boy of affordable realty. Not only are buyers forced to wait for their properties for much longer than due, there is uncertainly imposed on some of them who aren’t sure if their developers would be able to deliver stuck projects.

This also explains why various new infra developers haven’t been able to make the impact the authorities wished for. For instance, work on the Jewar airport that is set to start, hasn’t had a huge impact on sales numbers. Similarly, the Aqua Line metro also did not create the envisaged response from buyers. “Due to the prevailing negative sentiments, primarily caused by some of the biggest developers in the region facing insolvency, developers are struggling to improve sales numbers in Noida,” points out Dhruv Agarwala, Elara Group CEO.

Luckily for Gurugram real estate, image issues weren’t among the many problems this expensive property market faced because of a slowdown. Its issues were generic and not of its own doing, induced majorly by an overall slowdown in the property market. This is why as soon as some infra projects made its peripheries more approachable –the opening of the peripheral expressway – Gurugram saw a turn of luck. Data shows about 60 per cent of the units sold in Gurugram during the quarter ending June this year, were homes that are located in the peripheral areas and priced within Rs 25 lakhs.