Realty Check in Delhi/NCR

Capital values in residential and commercial real estate have more than doubled in some locations in the five metros over the past 2-3 years. In Delhi, the metro, malls and the Commonwealth Games are driving up land prices. So even though the work on NH8 is taking an inordinately long time, no one is complaining in Gurgaon. Ask the 4000 people who invested in Unitech Apartments over the past one year, or the scores who are queuing up at the banks for a home loan to fund their dream house!

Gurgaon and NOIDA have witnessed an unprecedented surge in real estate prices, and the spillover effect has been felt in Faridabad, Indirapuram and Vaishali in Ghaziabad. Demand in these places has grown, thanks to their proximity to well-established locations in the NCR. Even within Delhi, Mayur Vihar, IP Extension, Rohini are the next real estate boom towns. In Dwarka, where the Metro service to Connaught Place is expected to begin by the end of 2005, capital values have gone up by 50 per cent. Experts opine a 6-8 per cent appreciation in the inner city and about 10-12 per cent appreciation in the suburbs in the future.

Mumbai continues to be the most expensive residential real estate in the country, even though it has not shown the kind of upswing in prices that the Capital has. Property values have moved up by approximately 30 per cent in the past two years. Demand for places like Lower Parel and Byculla have gone up due to their proximity to south Mumbai and relatively low prices, with values surging 14-19 per cent last year. And the trends forecast a continued demand by end users in the real estate market.

Bangalore is still fighting the problems of a small city turning into a super metro but that's not stopping the real estate boom down south. According to Knight Frank India Research, the city has a huge untapped potential for bungalows and villas, and builders who have done just that are reaping the rewards in areas like Whitefield, Brookefield, Old Madras Road and Bellary Road. The trend here is not to invest in the traffic- congested town centre but to move towards townships that are likely to develop in the outskirts.

Investing in real estate in Kolkata would have been inviting disaster even 5 years ago. Well, no longer. With interest shown by IT companies like Wipro, IBM and Satyam and the Bengal Ambuja venture taking off, the city is suddenly showing a new lease of real-estate life. Places to look at are Rajarghat, EM bypass and Gariahat.

The commercial Property market has been fairly stable with the primary driver being IT/ITES which accounts for 70-80 per cent of all transactions. Retail real estate is still nascent. Although malls have mushroomed in all the metros, the business models needs to be looked at as the footfalls have been increasing but sales have been disappointing. Though the consumer is enjoying the mall culture, one can't really ring the death knell on them as yet.

The question however plaguing every real estate industry participant is "when will the bubble burst?" The good news is not just yet.

Given the wild climb real estate prices have been on, it is inevitable that they will plateau.

Almost all property experts agree that it does not mean they will slide. Prices will climb, but the rise will be far more sedate in the future. The key to this will be interest rates. If inflation is kept under check, interest rates will stay stable. You can then expect a surge in demand for housing and in values of property.

So, if you have been longing for a dream house, stop dreaming and buy one now. Believe us, there's only one way your investment can go, and it's up.

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About the Author
Ms Deepali Business Head 99acres.com

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