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The Lutyens’ Bungalow Zone in Delhi is just 1.5 per cent of the city’s 1,484 sq km spread, but high rises and multi-storeyed buildings in the area could mean a real estate boom in terms of construction. The urban development ministry recently accepted recommendations of the Delhi Urban Arts Commission to shrink the boundaries of Lutyens’ Zone by 5.13 sq km and allowing vertical development in areas that are proposed to be kept out of it. But it may take time for investors to get charged up as the buzz around Lutyens’ Delhi going vertical has been around for many years, point out industry analysts. Guided by stringent building norms that allow only bungalows in Lutyen’s, property prices in this Zone range from Rs 90,000 to Rs 110,000 per sq ft. Localities like Golf Links, Chanakyapuri, Jor Bagh and Sundar Nagar could now fall outside the ambit of Lutyens’ zone, permitting multi-storeyed buildings. While that may attract intense real estate activity, experts say implications on prices could depend on factors such as the volume of supply and the level of demand for property in the area.
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In fact, built-up property prices in areas, where high rises will be allowed, could fall a bit as supply will be more. “The cost of a plot may go up as one can construct more in a given area, apartment prices may come down because of higher supply,” says Anshuman Magazine, chairman and managing director of real estate consultancy firm CB Richard Ellis South Asia. On whether the Lutyens’ vertical development could have a major impact on property prices in the rest of Delhi and the national capital region, Magazine says that is unlikely. “Many buyers may prefer to come to that part of Lutyens’ where vertical development will be allowed, but prices will be much higher than in other parts of the city.”
In fact, built-up property prices in areas, where high rises will be allowed, could fall a bit as supply will be more. “The cost of a plot may go up as one can construct more in a given area, apartment prices may come down because of higher supply,” says Anshuman Magazine, chairman and managing director of real estate consultancy firm CB Richard Ellis South Asia. On whether the Lutyens’ vertical development could have a major impact on property prices in the rest of Delhi and the national capital region, Magazine says that is unlikely. “Many buyers may prefer to come to that part of Lutyens’ where vertical development will be allowed, but prices will be much higher than in other parts of the city.”
It is a good move to plan to reduce the Lutyens’ Zone by 5.13 sq km, bringing additional real estate in this coveted area, says Samir Jasuja, chief executive officer and founder of PropEquity. “We expect ticket prices of properties in the area excluded from Lutyens’ zone to fall as local builders offer smaller apartments.” While prices in the national capital region have corrected over the last few quarters, certain pockets, including areas that are planned to be excluded from Lutyens’ Zone, have not seen any major price reduction due to very low availability of properties for sale, Jasuja points out. In its latest report on luxury residences, international consulting firm Jones Lang LaSalle has brought out the significance of high rises in the luxury segment in cities such as Delhi and Mumbai.
In a study on luxury residences, international consulting firm Jones Lang LaSalle had brought out the significance of high rises in the luxury segment in cities such as Delhi and Mumbai. It said Mumbai and Delhi are the only cities with a real and sustainable demand for genuine luxury housing. “In other cities, high net worth individuals tend to buy land and build their own extravagant residences, but this does not fall under the purview of luxury home development.”
In terms of both pricing and quality of offerings, Mumbai’s luxury home market certainly holds its own, the JLL India had said. In Delhi, where the city’s elite restrict themselves to Lutyens’ Zone, central and south Delhi, supply is extremely limited. “Interestingly, luxury projects in India are now going vertical,’’ it had added. High-rise luxury projects optimise the limited space available, and also bring with them a sense of modernity; therefore, they wield their own kind of aspirational value, according to the study.
