Why Is Delhi Not Eager To Buy?

According to the findings of a recent study that covered eight cities, people in national capital Delhi are the least inclined towards buying property. The data for the fourth quarter of the financial year 2016-2017 suggest that people living in India's financial capital Mumbai have the highest buying propensity. This leads to a very pertinent question? What could be the reason behind the low buyers' sentiment in the national capital? This trend is harder to comprehend, considering property prices, on an average, are lower in Delhi when compared to prevalent rates in Mumbai. Smaller-crunched units are also a key feature of Mumbai real estate, something that can certainly not be a reason to invoke positive sentiments among buyers. What then could be the reason behind a dim buyer sentiment in Delhi?

Watch: DMRC To Sell Apartments In Delhi

Too big that it has failed

One possible reason for this could be the depreciation in property values. The national capital, as we all know, has not seen many new constructions in several years. The properties up for grabs here are mostly secondary homes, which have undergone physical decay over the years while their notional market value has gone up multiple times over.

Rakesh Mohan, 68, owns one such property at Mayur Vihar, a prominent residential locality in the city's east. “I bought this DDA (Delhi Development Authority) flat in the early 90s for Rs 10 lakh and the market value of this property is Rs 1.10 crore at present. While I have been trying to sell this second-floor property for many years now as I and my wife find it difficult to move up and down the stairs now, there have not been many offers so far,” says Mohan. The building does not have any elevators.

Going by the standard definition, a property worth a crore falls under the luxury category, and someone looking for luxury would definitely expect the housing society to have elevators, if nothing more. This leads us to believe Mohan might find it hard to sell his property anytime soon. Unfortunately, the national capital is full of property owners facing the same predicament.

Is development hindering growth?

While the Delhi Metro Rail Corporation strived hard to build its network before deadlines, earning itself many accolades, other businesses suffered. Traders at Connaught Place, for instance, saw their businesses bloom after the work on Metro network was finished. The same is true of localities across the national capital. Without doubting the long-term benefits of the public projects of similar nature and scale, it is safe to say that the construction work is doing some damage in the short and medium term. Nobody would like to hear noises involved in construction work day in and day out even if they hope to hop on the Metro right from their roofs in the coming future. As the city rebuilds itself to meet the changing demands, prospective buyers wait and watch for the work to finish.

Availing of fringe benefits

At a time when the national capital does not leave you with much choice, the peripheries welcome you with open arms. Why would a buyer not book a Rs 50-lakh flat in Noida and enjoy the benefits of a swimming pool, a parking lot and a gymnasium? Sure, this buyer would be depended on his own vehicle for all his commute purposes but he would be enjoying a better lifestyle by paying much less money. The rise of the suburbs with their brand-new flats is another reason why the old-pricy structure of Delhi may not be able to attract buyers. However, do not be mistaken. Buyers in Delhi are not left with much of a choice.