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Delhi-NCR Real Estate Market: Trends Shifting toward Affordable and Luxury Housing

Delhi-NCR Real Estate Market

The realty market in Delhi-NCR has gone through several changes in the past couple of years. This blog at Landkhoj.com, talks about the changing trends in the first half of 2024. It speaks of how affordable housing sales have declined and how luxury properties are gaining ground. We are also going to analyse the supply of housing units in Delhi-NCR. Closely linked to that will be a study on housing sales in Noida and Greater Noida.

• The Delhi-NCR real estate market has always remained an indication for the economic condition and consumer sentiment of the region.

• Recent data shows there is, in fact, a noticeable shift in the makeup of the market where luxury property listings benefit at the expense of affordable housing.

• This trend reflects changes in buyer preference, income levels, and a whole range of government policies.

Affordable Housing Segment

Share of affordable housing sales dropped to 24% in H1 2024

Factors at play in the decline:

• Rise in construction costs

• Land prices in peripheral areas going up

• Shift in developer focus to mid-range and luxury categories

Government initiatives to push affordable housing:

• Extensions of the Pradhan Mantri Awas Yojana scheme

• Extended benefits and sops from state governments such as lower taxation on construction in the affordable segment

• Stringent implementation of the Real Estate Regulation Act has forced developers to focus on project completions

Impact on First-Time Homebuyers:

• Fewer options in the affordable segment

• Rental housing to be the new norm

• Increased interest in locations further away from city centres

Luxury Real Estate Boom

Luxury sales touch 45% of the market share in H1 2024

Driving factors behind the surge:

• Growing number of high-net-worth individuals in the region

• Increased demand for spacious homes post-pandemic

• Foreign investment in premium real estate

Popular luxury locations:

• Golf Course Road, Gurgaon

• Lutyens' Delhi

• DLF Camellias, Gurgaon

• Noida Expressway

Trends in luxury housing:

• Focus on sustainable and green buildings

• Smart home technology integration

• Emphasis on wellness amenities, such as home gyms and meditation spaces

Supply of Housing Units in Delhi-NCR

Overall supply trends:

• Total new launches in H1 2024: Approximately 25,000 units

• Year-on-year increase of 15% compared to H1 2023

Segment-wise breakup of new launches:

• Affordable housing: 20%—5,000 units

• Mid-range housing: 35%—8,750 units

• Luxury housing: 45%—11,250 units

Key areas with maximum new supply:

• Gurgaon: 40% of total new launches

• Noida and Greater Noida contributed 35% of the total new launches, while Ghaziabad and Faridabad contributed 25%.

Unsold inventory:

• Total unsold units as of June 2024: Approx. 1.5 lakh

• 10% reduction in unsold inventory compared to December 2023

Challenges in housing supply:

• Land scarcity at prime locations

• Regulatory hurdles and approval delays

• Impact of rising input cost on project viability

Housing Sales in Noida and Greater Noida

Overall Sales Performance:

• Units Sold in H1 2024: Approx. 15,000

• 20% year-over-year increase against H1 2023

Segment-wise sales breakup:

• Affordable housing: 30% with 4,500 units

• Mid-range housing: 40% with 6,000 units

• Luxury housing: 30% with 4,500 units

Popular micro-markets:

• Noida Expressway

• Sector 150, Noida

• Greater Noida West (Noida Extension)

Factors that have worked in the favour of Noida and Greater Noida:

• Better connectivity in the form of Aqua Line metro and the upcoming Jewar Airport

• Comparatively more affordable than Gurgaon

• Large-scale infrastructure development

Issues bothering buyers:

• Delayed possession in some projects

• Congested traffic in rapidly developing areas

• Lack of social infrastructure in newer sectors

Conclusion:

The Delhi-NCR real estate market has been doing a slow-burning but sure-shot fundamental shift, where luxury housing picks up and affordable housing weakens. This clearly makes its way to new supply also, which now has more units being launched in the mid-range and luxury categories. Demand for all segments across Noida and Greater Noida is expedited by the infrastructure developments taking place in the region and comparably more affordable prices.

With changing market dynamics, stakeholders will have to move along and keep thinking of the reflection on supplying affordable housing. Going by the current trend, there are chances of further transformation of Delhi-NCR's real estate market in the coming years, driven by economic factors, policy initiatives, and shifting consumer preference.