Delhi real estate rates climbing

House prices up 10-25% in January-March 2004, premium business property rents up 14%

Residential property prices rose 10-25 per cent in the capital during the last quarter of 2003-04, while rentals in central business districts recorded a rise as high as 14 per cent, a real estate consulting firm said.

The real estate market in the last quarter seemed to have stabilised after witnessing cyclical fluctuations, said real estate consultants Cushman and Wakefield in its latest market report.

The rental variation was in the range of 10-25 per cent for the capital's prime and grade A residential properties during the fourth quarter as against the same period last year.

The rise in capital values against the peak value of 1997 for posh South Delhi colonies like Vasant Vihar, Golf Links and Westend coupled with a fairly decent rental yields has lured a lot of small investors into buying properties in these areas.

But rental values in Gurgaon for prime and grade a residential properties registered an impressive 35 per cent increase. Satellite cities, Gurgaon and Noida, would continue to offer quality residential developments, the report said. Gurgaon was expected to have an edge over Noida because of the presence of large developers like DLF and Unitech.

Cushman and Wakefield predicted that large quantum of new constructions in Gurgaon and Noida would support the increased demand from users in the mid-budget segment. The demand for condominium style housing in the suburbs, which offer cost efficiency and good residential infrastructure, would increase in 2004, the report said.

On the trends in the Capital's commercial markets, Cushman and Wakefield report said: "Yields are bound to come under upward pressure within next 18-24 months as mall markets mature".

The rental price for office accommodation recorded a 4 per cent dip in the prime commercial locations while the capital value for office space registered a 14 per cent rise in March, 2004 than what prevailed six months ago.

The real estate market in southern cities like Bangalore and Hyderabad would be driven by the demand generated from the technology sectors like infotech, telecommunication, ITES and research and development, the report said.

In Bangalore, the vacancy levels that had dropped in the past year, because of an upsurge in the market activity, were appearing stable now and the rental and capital values across the micro markets could strengthen in the coming months, the report added.

Hyderabad and Bangalore have been witnessing a narrowing down of rental values between the central business district and off-central business district, according to the report. Biotechnology and pharmaceutical industries are seen generating considerable demand in Hyderabad in the coming future.

Looking northwards

• The real estate market during the last quarter stabilised after witnessing cyclical fluctuations
• The rental variation was in the range of 10-25 per cent for the capital's prime and grade A residential properties in the fourth quarter as against the same period last year
• Gurgaon and Noida will continue to offer quality residential developments
• The demand for condo-minium style houses in the suburbs will increase in 2004