NCR's real estate dealings have made quite the noise lately. Ultra luxury flats in Gurgaon have gotten sold for ₹60-100 Crore, while the luxury market is bustling like never before. Even the middle of the road, premium market has grown so much that the weighted average price of new residential projects in Gurgaon, Noida, Greater Noida, and Ghaziabad has more than doubled in the past five years.
Of all the above, Noida has seen the largest increase, with prices rising 152%, from about ₹6k/Sq ft in 2019 to ₹15k/Sq ft in Sep 2024. It's followed by Ghaziabad, Gurgaon and Greater Noida, at 139%, 135% and 121%, respectively. Total sales of luxury housing in the region is expected to cross ₹60,000 Cr in 2024, while in the office real estate space, NCR is now the 6th most expensive market in the APAC.
But why?
NCR has absolutely horrid summers with temperatures going as high as 50°C. 40°C (104°F) is a joke for Delhiites; many wear Italian suits with jackets during those afternoons. Some faint, but the show goes on. Every year, from April to June.
Then comes Monsoon. This is an especially fun time because it sees places like Delhi & Gurgaon transform into Venice & Bruges respectively. It rains heavy, and the arterial drains are always choked. This leads to severe backflow and flooding of the entire city with fresh sewage water. Roads get submerged, cars start to float, people make boats out of plastic bottles. A sweet celebration happens every year. This is the scene from July to Mid September.
From Mid September to Mid October, the city catches a break. Terrific weather, no water on the roads, beautiful people, and most importantly - clean air. But then comes the onset of winters and the great days of free (and mandatory) cigarettes begin.
It sounds ludicrous, but earlier the AQI measuring instruments weren't designed to go past 500. Thanks to Delhi in winters, they evolved to first go till 999, and then exceed that as the city kept "developing". People may have forgotten, but winters were actually the most beautiful time for the city till early 2010s. Absolutely picturesque. But they're now mostly associated with words like "gas chamber", "maut ka dhuan", "dhundhla bhavishya", etc. This stays from Mid November to February.
From February to April, Delhi is back to being livable, before the cycle of hell repeats itself.
So basically, Delhi is practically livable for only about 3 months out of 12. When will it start affecting its real estate prices? Ultra luxury & luxury properties barely give a rental income of 2-4%. The game only stands on appreciation. How far will this go?
Delhi's pollution issue cropped up after Punjab & Haryana's Preservation of Subsoil Water Act was passed in 2009. It's been 15 years that this has been on. Does it make sense to hope that the politicos will change anything?
Or is it more likely that we see a "tip" in the number of people who choose to exit (or not come in)? In that case..
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