MARKET ANALYSIS INDIVIDUAL PROJECT
I N D I V I D U A L P R O J E C T
S.NO PARTICULARS PAGE
The Indian Real Estate Market
Real Estate Market in Delhi NCR
-Residential market in Ghaziabad
-Budget wise analysis
-Property type analysis
Problems & Challenges
THE INDIAN REAL ESTATE MARKET
The Indian real estate and construction industry is an integral part of Indian economy and
plays an important role in the development of the country’s infrastructure base. The
contribution of the real estate sector to India’s gross domestic product (GDP) has been
estimated at 6.3 per cent in 2013.The sector comprises of four sub-sectors- housing, retail,
hospitality, and commercial. While housing contributes to five-six percent of the country’s
GDP, the remaining three sub-sectors are also growing at a rapid pace, meeting the
increasing infrastructural needs. Riding high on the back of rapid urbanisation, positive
demographics and rising income levels, the Indian real estate sector has attracted significant
investment over the past few years. The growing stability of the market is reflected by the
continuous growth of the core investors, with over Rs 7,705 crore (US$ 1.14 billion) invested
in ready office space during the last three years.
The real estate sector of India is expected to post annual revenues of US$ 180 billion by
2020 as compared to US$ 66.8 billion in 2010-11, registering a compound annual growth
rate (CAGR) of 11.6 per cent. In fact, the demand is expected to grow at a CAGR of 19 per
cent between 2010 and 2014, with tier I metropolitan cities projected to account for about 40
per cent of this.
Mumbai, NCR and Bengaluru account for 46 per cent of total office space demand in India.
Demand growth projected to be the highest in Tier 2 cities such as Kolkata and Chennai
The prime office space segment across the country’s key cities- Mumbai, the National
Capital Region (NCR), Pune and Bengaluru has witnessed a fresh supply infusion of more
than 20 million square feet (sq ft) in the first six months of 2013, witnessing a growth of 16
per cent on year-on-year (y-o-y) basis, as per a report by CBRE.
The country is ranked 20th
among the top global markets for real estate investment in 2012,
with investments worth US$ 3.4 billion during the year, according to a latest report by
Cushman & Wakefield. It is also estimated that foreign direct investment (FDI) into real
estate in India will increase to US$ 25 billion over the next 10 years.
Construction development sector (including townships, housing, built-up infrastructure &
construction-development projects) has attracted a cumulative FDI worth US$ 22,247.50
million from April 2000 to June 2013. FDI flows into the construction (infrastructure) activities
during the period stood at US$ 2,198.77 million, according to the department of industrial
policy and promotion (DIPP).
REAL ESTATE MARKET IN DELHI NCR
Delhi NCR is the largest urban agglomeration in India and the second largest with a
population of 22,157,000 in the world. It comprises of 19 districts in 4 states namely Delhi,
Haryana, Uttar Pradesh and Rajasthan with a total area of 45,887 km2
This sub-market has an independent Planning Board (THE NCR PLANNING BOARD), which
was constituted to channel the flow and direction of economic growth and development along
more balanced and spatially oriented paths. The body creates its own functional plans for the
various constituent sub-markets of Delhi NCR and ensures implementation at state level,
keeping in mind the overall Regional Plan.
Residential markets across the NCR observed subdued activity in the first half of 2013 as
compared to the previous review period. The residential market of Delhi witnessed stagnancy –
concentrated in both the mid-end/high-end as well as premium housing projects. Buyer interest
remained largely focused upon cost effective suburban markets, with prime areas witnessing no
new launches during the first half of 2013.
Satellite towns/cities of Delhi:
Ghaziabad, the cultural city of Uttar Pradesh is a wonderful combination of tradition and
modernization. Ghaziabad is the second largest city in Uttar Pradesh having a current
population of 23,58,525 . Administravitely the city is divided into five areas: the City zone,
the Kavi Nagar zone, the Vijay Nagar zone, the Mohan Nagar zone and the Vasundhara
zone. Ghaziabad is one of the most culturally significant cities in Uttar Pradesh. Ghaziabad
was an important center during the Indian Independence Movement. Today Ghaziabad is
known for its numerous educational institutes and large student population city and the
presence of some major industrial units.
Major Real Estate Hub in Ghaziabad
NH-58(Raj Nagar Extension)
Major commercial/industrial region in Ghaziabad:
Raj Nagar Industrial area
RDC Raj Nagar
Connectivity to Delhi:
From Dilshad Garden
Towards Tronica city
RESIDENTIAL MARKET IN GHAZIABAD
Housing in Ghaziabad are gaining popularity among property aspirants in Ghaziabad. Ghaziabad has
always been known as an industrial city. But, today it is becoming popular for contemporary &
affordable housing. Many mass housing projects are coming up in Ghaziabad. You can find Studio
apartments, town houses, Villas, 1-4BHK flats, duplexes, luxurious condos & many other housing
options in this city. Many leading builders are planning to create world class housing infrastructure in
Ghaziabad. Many townships have been developed in this city & many more are in planning stage. Not
only the people of Ghaziabad but the people of Delhi, Noida, etc are also investing in properties in
Ghaziabad. Since flats in Delhi & Noida are becoming expensive day by day, it is becoming difficult
for the middle class to rent or own a flat in these cities. This has made many people to opt Ghaziabad
for renting & buying flats .The city’s proximity to Delhi & Noida has made this possible. People looking
out for a peaceful place for living are considering the well-planned city of Ghaziabad to meet their
You can find low cost to expensive premium apartments in Ghaziabad. Premium apartments in areas
like Vaishali, Vasundhara, Kaushambi etc. are available in price range of Rs35-Rs65 lakh. You can
also find more costly premium apartments in this city. You can find all kinds of modern amenities like
swimming pool, gym, health club, etc in these apartments. The low cost apartments in Ghaziabad
don’t have plush facilities but have some basic facilities like parking space, proper security system
etc. Flats in Ghaziabad cater to all income groups & family sizes. Many flats in this city are built &
managed by well-known construction companies like Omaxe, Supertech Group, Shipra Group,
Parsvnath Constructions, Unitech etc. All these companies offer fine living at affordable prices. They
also offer premium apartments in many localities in Ghaziabad.
Indirapuram, Kaushambi, Vaishali, Vasundhra:
These 4 regions in Ghaziabad are in close proximity to each other and is much sought after areas
of Ghaziabad and are regarded as prime residential areas and one of the most preferred localities
in NCR due to its close proximity with both Delhi and Noida. These are located on NH-24 in
Ghaziabad.It has seen a tremendous increase in price index over last 3-4 years.Though during the
slump of 2007-08 the market has seen a dip in property rates.But since then prices are shooting.
Reasons for increase in prices:
Raj Nagar Extension (NH-58):
Raj Nagar Extension (NH-580) has emerged as one of the best option for Home Buyers in Delhi/NCR region. It
is situated on the new Meerut bypass. The entire area is developed and this has hiven the authority and
developers a chance to carry on a planned developments here. The USP of this area is an adjoining perennially
green and unpolluted belt, which is going to remain undisturbed as Ghaziabad Development Authority has
declared 500 acres along Hindon river as a green belt and banned all construction activity in the area. Thus it
has led the pack with respect to the change in capital values in the past 3 years. It provides a variety of
affordable homes ranging from studio apartments to 4 BHK. And has seen a tremendous increase in the capital
values since the construction has started there.
Connectivity through Metro
Availability of Railway Station and ISBT(Anand
Being close to Delhi (only 7 Kms)
Major Developers in Raj Nagar Extension:
National Highway-24 is emerging as one of the best option for the affordable housing as one can get
a house in mere 15 lacs. Many reputed developers have their existence in this area namely-Wave
Infratech, Aditya World City, Land craft, Crossing Republik, Mahagun; Antriksh. Having direct
connectivity to Delhi and being on the outskirts of Noida, it has seen a very huge demand from
investors as well as from the end users. Market Price Ranges from: INR 2443-2801 psf.
Major Developers on NH24
Landcraft Developers (Golf Link)
Price ranges from 16-55 lacs
Market price=> 2914-2957 psf
Provides 1-4 Bhk affordable homes
INDRAPRASTHA YOJANA (BHOPURA):
It is an upcoming residential area situated on the Loni Border of Delhi-Uttar Pradesh providing
affordable homes for mid-income families Since this region has got the approval from GDA the prices
has increased tremendously but from the last two quarters the prices have declined certainly. . The
market price varies from 2688-3000 psf..
Major upcoming projects:
DEMAND AND SUPPLY
Ghaziabad comes to the rescue for those looking for a property within Rs 20-50 lakh budget,
with all modern facilities. Developers in the area are offering residential space with all
facilities and amenities. The options are endless. Raj Nagar Extension currently has more than
a dozen new residential projects where a homebuyer can find property within Rs 40 lakh.
KEY DRIVERS OF DEMAND:
SHARE OF DIFFERENT REGIONS IN RESIDENTIAL SUPPLY:
BUDGET WISE ANALYSIS OF DEMAND AND SUPPLY:
BHK CONFIGURATION ANALYSIS OF DEMAND AND SUPPLY:
Approximately 75 per cent demand and supply of 2BHK units, the most-preferred unit size
during the Apr-Jun 2013 quarter, was limited to localities such as Indirapuram,Vaishali and
3BHK units also remained popular amongst the buyers with 30 percent demand during the
quarter. Supply was found to be 7 per cent higher than the existing demand even though both
demand and supply remained almost stable.
The budget category of Rs 40-70 lakh recorded maximum consumer demand
during the Apr-Jun 2013 quarter with demand inching up by 2 per cent from the
Jan-Mar 2013 quarter
Healthy demand and supply was noted for the Rs 20-40 lakh category even though
a marginal drop of 2-3 per cent in both demand and supply was observed during
the Apr-Jun 2013 quarter.
During the quarter, a significant rise of 8 per cent was registered in the supply of
properties worth Rs 40-70 lakh.
PROPERTY TYPE ANALYSIS OF DEMAND AND SUPPLY:
Preference for multi-storey apartments continued to show an upward graph with more than
70 per cent buyers showing an interest in the category during the Apr-Jun 2013 quarter.
Supply in the city, however, was not found to be aligned with the demand trends. Supply of
multi-storey apartments fell short by 21 per cent.
Single floor units were found to be easily available in localities such as Indirapuram,Vasundhra
PRICE VARIATION IN DIFFERENT REGIONS :
The above chart shows the price per sq.ft of a multi-storey apartment in different regions of
Ghaziabad. If we look at the appreciation in the capital rate in these regions within the last 2
years,we can depict that For the Large investor ,Vaishali is the best option whereas Raj Nagar
Extension provides best option to invest for the small investor.
5595 5514 5428
Average Price of multi storey
MARKET PRICE TREND
The above line graph depicts the fluctuation in market price in different sub-regions of
Ghaziabad. It shows that Vaishali has the highest capital value among all the regions.
Nh-58(Raj Nagar Extension)has almost remained stable in slum as well as in times of boom.
Indirapuram has a seen a steady growth throught the period and is considered as most
preferred place to live.With increase in demand,prices are increasing at a constant rate.
Oct-Dec'12 Jan-Mar'13 Apr-Jun'13 Jul-Sep'13
As the unsold inventory is very high. So, the new
construction has been slowed down and thus, the inventory
overhang declines significantly
PRICE CORRECTION ACROSS AFFORDABLE AND MID SEGMENT HOUSING:
The shift of buying activity to emergent centers of more affordable housing options like Raj
Nagar Extension and Crossings Republic, has lead to the correction of the average transacted
price in the Ghaziabad market
PROBLEMS AND CHALLENGES
There are many problems that are faced by the individual residents as well as the
developers or the builders whether they are social, economical and environmentally related.
Global Economic Crises of 2012 & Indian Economic Crises of 2013
Indian economic crises of 2013 where Indian Rupee depreciated ra heavily, took a toll on the
FDI in retail sector as well as the uncertain environment shied away the banks from lending
creating liquidity crunch in the market. These events unfolded in response to the European
Crises or more popularly known as PIGS Crises. European Union is one of the biggest
importer of Indian goods and major contributor to the FDI. When situation went bad in
Europe it affected India as well. The overpricing and lack of liquidity in the real estate market
is hurting both the demand as well as the supply. Thus, the corrections in the prices are
expected to be coming very soon. As quoted by-Anshuman Magazine, Chairman & M.D
The political environment of the city is very difficult to predict, which eventually give rise to
the problems for developers or builders and thus making difficult for them to provide
possession of their project in time. And also it is increasing the cost of the houses.
Law & Order
According to NCRB crime rate in Ghaziabad as compare to the domain state is 97.8(2011).
The total number of cases registered in the state of UP is the highest as compared to the rest
of India. The situation of law and order gets worse with the communal riots in the state. The
recent controversies of ‘Muzaffar Nagar riots’ does not improve the image of the state.
Lack of transparency in India (94th
out of 176) is hurting its image in the global scenario. The
foreign companies are maintaining a distance from the country due to lack of clarity in the
policies and high degree of corruption. The state of UP in this regard also does not help at all
rather makes it worse, it fares relatively low on the transparency within the country as well.
There are places which are always jam packed due to non-availability of parking spaces in
market area and illegal encroachment by the shop owner’s in old Ghaziabad.
Ghaziabad had been listed as the third most polluted industrial city after a study conducted of 88
industrial clusters by the Central Pollution Control Board in 2009. On the scale of CEPI, Ghaziabad
had recorded a score of 87.37 which subsequently came down to 81.14 in 2011. For recording CEPI
scores in excess of 80, Ghaziabad had been put in the category of ‘critically polluted areas.
Other key challenges that Ghaziabad real estate market is facing today are:
Lack of clear land titles.
Absence of title insurance.
Lack of adequate sources of finance.
Shortage of labour.
Rising manpower and material cost.
Delay in approvals from government agencies.
GOVERNMENT POLICIES REQUIRED TO BOOST
To increase connectivity from Delhi, GDA has recently approved a plan of a metro link from Dilshad
Garden to New Bus Stand. New Faridabad-Noida- Ghaziabad (FNG) corridor is another landmark for
Ghaziabad that will increase connectivity with two big and developing cities of NCR.
Due to high-rise apartments in Ghaziabad, GDA now has plans to explore possibilities of mono rail
from Vaishali to Ahinsa Khand initially. Trans-Hindon area is going to be the next big investment zone
for real estate players because of high priority on infrastructure. GDA’s current plan to increase metro
route till Collectorate is going to bring huge investment opportunities for Ghaziabad and position it as
one of the most prominent locations in Northern India.
The Reserve Bank of India (RBI) has relaxed norms to raise funds via external commercial
borrowings (ECB) for low-cost affordable housing projects. Now, developers and builders with
three years of experience in undertaking residential projects are eligible to raise funds through
the ECB route.
The Ministry of Housing & Urban Poverty Alleviation has planned to introduce a single-
window system for clearance of all real estate projects across the country. If it is made
applicable by Ghaziabad Development Authority(GDA) then certainly Ghaziabad will attract a
large sum of investment for new housing projects
New Real Estate (Regulatory and Development) Bill, 2013 tries to bring more
transparency to the system, should be implemented in the state. Land Acquisition,
Rehabilitation and Resettlement Bill, 2013 will also help in solving the land
Ghaziabad lie behind among the 22 mega cities in terms of transportation facility. It doesn’t
have well developed public transport network. The major share is of ‘shared autos’ among all
public transport vehicle. So it really needs to facilitate its transportation facility, it has to
boost its bus service frequency and their numbers.
A Road Ahead
Given the current level of development and friendly government policies, India’s realty sector still has
a long way to go. Responding to an increasingly well-informed consumer and keeping in mind the
globalisation of the Indian business outlook, real estate developers have also shifted gears and
accepted fresh challenges. The most marked change has been the shift from family owned
businesses to professionally managed ones.
A growing migrant population due to increasing job opportunities, together with healthy infrastructure
development, is underpinning demand in the region’s residential real estate market. Residential real
estate in India accounts for a huge 90-95 per cent of the real estate industry. According to estimates
by Crisil, the demand-supply gap in India’s housing sector will stand at 75.5 million units by the end of
2014. Demand is expected to be boosted further due to India’s demographic dividend and the growing
trend of nuclear families.
Details of Old Ghaziabad residential market
Metro Extension Proposals
FDI : Foreign direct investment (FDI) is a direct investment into production or
business in a country by an individual or company in another country, either by
buying a company in the target country or by expanding operations of an existing
business in that country. Since the approval from cabinet of FDI upto 100% in
construction industry.FDI inflow in India stands at 4 billion USD.
GDP: Gross domestic product (GDP) is the market value of all officially recognized final
goods and services produced within a country in a given period of time. Real Estate sector
contributes 6.3% of the total GDP.
Sattelite towns/cities: A satellite town or satellite city is a concept in urban planning
that refers essentially to smaller metropolitan areas which are located somewhat near to, but
are mostly independent of larger metropolitan areas.
Capitalization rate: A rate of return on a real estate investment property based on
the expected income that the property will generate. Capitalization rate is used to
estimate the investor's potential return on his or her investment.
GDA: Ghaziabad Development Authority.
Transparency Index: Real Estate Transparency Index is a unique biennial survey covering
97 markets worldwide. It aims to help real estate players understand important differences
when transacting, owning and operating in foreign markets.
CEPI: Comprehensive Environmental Pollution Index.
ECB: An external commercial borrowing (ECB) is an instrument used in India to facilitate
the access to foreign money by Indian corporations and PSUs (public sector undertakings).
ECBs include commercial bank loans, buyers' credit, suppliers' credit, securitised instruments