Real Estate Sector is that part of the Indian economy that needs no description. Its importance is known to all. As it is a major contributor to India’s GDP (Gross Domestic Product) and for increasing employment opportunities from diverse sectors. But from the last some years, real estate sector is facing harsh blows in its growth due to various reforms. However, the most important market of the realty, which is obviously Gurgaon, remained unaffected by the slump that hit the sector.
Gurgaon, which is an exceptionally important market in terms of numerous magnificent residential projects especially in the National Capital Region (NCR). A large number of project delays with a cash crunch in the economy added to the woes of this sector. A lot of time for developers and builders is spent in getting approvals for the project which not only resulted in project delays but also led to the loss of capital in the process. It is evident that although the implementation of RERA (Real Estate Regulatory Act 2016) and demonetization with its strict norms brought transparency and increased confidence and trust among buyers and builders, it slowed down the process too which is affecting prices and sales. In major parts of the country, sales dwindled in number, prices of properties fell down and many new projects launches are delayed. But amidst dark clouds, many builders and developers are still hoping that real estate price trends will witness an upward trend soon especially in the city of Gurgaon.
Many investors and NRI’s are captivated by the charm of the mega real estate projects by leading developers and builders like DLF, Godrej and much more in Gurgaon. This resulted in the rise of realty sector and astounding growth in Gurgaon. However, from the past two-three years, there is a downfall in the real estate market in many parts of the country. But the major reason for this depressing trend is the overall economic slowdown. Prices rose to the supreme level, therefore, some buyers are waiting for prices to come down. But investors who bought the properties in the boom phase of the Indian real estate sector did not want to risk their hard earned money. Another obstacle in the path of growth id unsold inventory units. NCR (National Capital Region) has witnessed country’s highest unsold inventory figures at almost 1,70,000 units. Although, Gurgaon itself has just 22,000 unsold units in this. But it is like a blot in the reputation of Gurgaon as a major market in the real estate sector. The worst scenario amongst all is that approximately 30 percent of the unsold inventory is under construction and the inhabitable sector is added burden. In an attempt to lure home buyers, many developers and builders offered freebies, discounts, and various schemes so that they can deal with the liquidity which is brought as a result of these unsold inventories in perfectly inhabitable sectors. These attempts did not contribute much to bring back lost luster to the Indian Real Estate Sector. Approximately 25 percent decline in price was witnessed in comparison to 2014. It is pertinent to say that although real estate market in Gurgaon favored developers and builders during its boom cycle of 2016. But, the time seems promising on the buyers’ front as the implementation of RERA (Real Estate Regulatory Act 2016) gave buyers a weapon to rule the market in Real Estate Sector. Affordable housing acted like a silver lining in reality as the market in Gurgaon slowed down a bit but still, things were never out of control. In fact, a maximum number of new projects were launched in Gurgaon within NCR (National Capital Region). Haryana government ‘Affordable Housing Scheme’ eased the market for builders a bit. Still, projects are incomplete due to a liquidity crisis in the past few years. Hence, new launches were still less by around 30-35 percent on the yearly basis in comparison to the boom phase of Gurgaon’s realty sector.
On the positive front, things seem to be improving, hurdles are vanishing and new future is foreseen for the Gurgaon’s realty sector. With a great projected growth of the country’s GDP (Gross Domestic Product), it is expected that there will be more demand for properties among investors as robust and flourishing economy will add up to more income, hence, purchasing power will be increased. In fact, noble initiatives of the government like ‘Make In India’ will give a sense of relief to the developers and builders by raising housing demand. So, residential projects may see the light of the day and flourish more. Since Gurgaon is the main market of the Indian Real Estate Sector, its importance is making nearby surrounding areas glisten by raising its importance in the manufacturing sector.
Other attempts by the Modi Government to improve this sector are proving to be important in the growth of this sector. The most influential step is the Smart Cities Project which made Gurgaon shine amongst all other cities. This would turn out to be a boon for the real estate sector. Another factor was the RBI’s rate cuts that affected the bank’s lending rates during the second quarter of the year. It resulted in the reduction of rates of home loan and hence increase the demand for these breath-taking residential complexes by leading builders.
It is indicated by these remedial steps of the government that finally, the government has paid attention to the slow down in the most significant and dynamic sector of the economy although the countries slowdown has been dealt with. Now, with meticulous planning and developmental steps, it is expected that the Real Estate Sector will illuminate again. Even a small effort can take cities like Gurgaon to greater heights. Since the situation in Gurgaon is not so adverse as compared to other major cities, a little stimulus can help it to make a most sought comeback and shimmer again as it was during the rising phase. Although things can’t be changed overnight, continuous efforts can again bring back real estate pricing trends in Gurgaon back to normal.