South Delhi bucks realty trend with growth in sales

NEW DELHI: The real estate industry might be going through a crisis, but posh areas in South Delhi seem to be untouched by it. Real estate consultant CBRE said capital values in South Delhi increased 10-15% during 2017-19, while the number of units sold has also grown by almost 50% since 2016. According to the developers and property agents, this growth is fuelled by the third and fourth generation of owners seeking better returns from the property.
“Delhi is the largest market in northern India. There is a large audience of buyers that wants to continue in Delhi because it’s their principal or sole place of business. The relatively affordable micromarkets of South Delhi are witnessing sales activity as these buyers cannot relocate their businesses to the suburbs,” said Gaurav Kumar, co-head, capital markets and residential, CBRE India.

New Delhi has emerged as the ninth fastest-growing prime residential market in the world, with average luxury home prices in areas such as Greater Kailash, Vasant Vihar, Anand Niketan, Defence Colony and Green Park rising 4.4% on-year in the quarter ended September, showed Knight Frank Prime Global Cities Index.

“South Delhi is witnessing three type of activity. One is sale of the entire building; the second is a joint venture (JV) where the original owner retains a part of the building and sell the rest; and the third is where the owner invests to redevelop. Almost 70% prefer JVs as they not only generate money, but also help in redeveloping the property,” said Rohit Chopra of SanD Advisory.

South Delhi has been an outlier in context of the overall residential market. While volumes have been challenged elsewhere, sales in South Delhi have been consistent and robust over the past five years, especially in the upper mid-end of the market. CBRE data shows that against 9,837 units sold in 2016, the number in 2019 could go up to 13,460. Almost 60% of the sales are in Panchsheel Park, Panchsheel Enclave, Greater Kailash I and II, Anand Lok, Neeti Bagh, SDA, Gulmohar Park and Green Park.

“There is no impact of the slowdown since there is always demand, and inventory is limited. Since sale of independent floors is allowed, inventory is created when an extra floor is built,” said Vaibhav Agarwal, COO, LFW Homes.