 "Real Estate, Realty sector, Construction, Realty")
Prime Minister Narendra Modi inaugurated the Haryana section of the Dwarka Expressway on Monday. Real estate developers and consultancies said it would be a game-changer for the industry and lead to a further increase in supply in the region. However, demand is likely to outstrip supply, leading to further appreciation of realty prices.
The 19-km-long Haryana section of the 8-lane expressway has been built at a cost of around Rs 4,100 crore. It includes two packages of 10.2 km long Delhi-Haryana Border to Basai Rail-over-Bridge (ROB) and 8.7 km long Basai ROB to Kherki Daula. The expressway will also connect the Indira Gandhi International Airport in Delhi with the Gurugram Bypass.
Prices already up in anticipation
In recent years, the region has witnessed a steep home price rise in anticipation of the expressway's completion.
Data shared by real estate consultancy Anarock showed that the average property price in the region went up by 41 per cent between 2020 and 2023—from Rs 5,890 per square foot (psf) in 2020 to nearly Rs 8,300 psf in 2023.
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The main reason behind the price rise has been a multi-fold increase in residential as well as commercial demand in the region.
"With the expressway now complete, we are witnessing a promising downturn in unsold inventory levels sectors bridging Gurugram and Delhi, from a significant 25-30 per cent 8-10 years ago to a mere 7-8 per cent now," said Anshuman Magazine, chairman and chief executive officer (India, South-East Asia, Middle East & Africa) at CBRE.
Data shared by another consultancy, JLL India, showed that in 2023, the sales of homes in this region were 67 per cent higher than in 2022.
"These homes were worth a whopping Rs 25,000 crore. Interestingly, out of these 12,409 units, 97 per cent were under construction at the time of sale," it added.
One of the major developers in the region, Signature Global, recently launched a luxury project, "DE LUXE-DXP," in the region. The project has already been completely sold, and the company will invest Rs 2,200 crore to deliver it by 2028.
"This new expressway would not only provide better connectivity for the close vicinity and locations of SPR, New Gurugram and Sector 37D at Dwarka Expressway, it would be a catalyst for price appreciation and promises a bright future for the real estate market in the region," said Pradeep Aggarwal, founder and chairman, Signature Global (India) Ltd.
Realtors betting on higher supply
In reaction to the increase in demand, real estate developers are now focussing on a higher supply in the region. Anarock said it expects more than 10,515 housing units ready for possession within the next two years in the region.
According to Ritesh Mehta, senior director and head (North and West) of residential services and developer initiative at JLL India, "Around 175 acres of land across 17 separate deals valued at over Rs 3,100 crore have been acquired by real estate developers since 2022 in this submarket."
Apart from these outright purchases, developers have signed joint agreements for over 30 acres in this submarket in the last year.
Industry estimates suggest that the region currently has 29,742 under-construction homes in the pipeline, including luxury and affordable homes.
"We can expect more developer interest in this micro market leading to increased housing supply in future," said Ravi Shankar Singh, managing director of residential transaction services at Colliers India.
"We can expect a surge in new launches, including both residential and commercial projects," added Mohit Jain, managing director at Krisumi Corporation.
JLL India said it expects a growing supply of "high-quality residential properties" in the region in coming years.
Despite higher supply, prices and rents to continue rising
Despite higher supply, however, the real estate prices and rents in the region are expected to continue rising.
"The realty market in Gurgaon is poised for a significant upswing, and property prices are likely to witness a steady appreciation, making this an opportune moment for those looking to invest in the future of urban living in Gurgaon," said Pankaj Pal, managing director at Whiteland Corporation.
Magazine said, "We foresee a notable appreciation in property and land prices in the vicinity, potentially rising in the coming years, offering lucrative returns on investment for early investors."
"With the improved infrastructure and connectivity, rental properties in the region are also expected to see an upswing in demand," he added.
