Of all the cities in India, the NCR region and especially Gurgaon has been the most affected with the real estate slow-down. Property rates in Gurgaon have seen a dampening of almost 15 to 20% in the past 1 to 2 years. There are quite a few reasons for this; however, the most striking has been the indifference of the administration towards the issue of developing the promised infrastructure.
Real Estate market in Gurgaon for long has been dependent on the Delhi market; the individual investors investing in property in Gurgaon were primarily the ones who had disposed of property in Delhi and as property prices sky rocketed in Delhi due to higher demand, Gurgaon property market saw an equivalent spike in prices. This game continued till 2013 and builders in Gurgaon failed to anticipate this bloating balloon; considering it as a normal market growth, they went in for ambitious high end projects with big price tags. Once the slump started in 2013, the funds dried up, as builders had invested the collected funds in a series of new projects; the unsold inventory started to pile up, with the investor shying away from the market due to higher price tags.
The administration has played an equally negative role. Real Estate builders have planned projects based on Gurgaon Master Plan and infrastructure developments; for example, the Dwarka expressway, North and Southern periphery roads were to be ready by 2013; out of the three roads not even one is complete even after 5 years of planning and execution and neither there is any perceptible urgency to complete the projects. A number of residential projects are ready for possession in the new sectors of Gurgaon, however due to lack of basic infrastructure the end user or families cannot shift in. Unfortunately, the administration is still not showing any keenness or urgency to develop the infrastructure and in-fact have raised their hands; further the administration has been pressurizing builders to create the infrastructure as ‘infrastructure development charges’ have been collected by them. This unprofessional approach by HUDA and MCG has harmed the flats in Gurgaon immensely. Basic amenities like sewage, water supply and electricity are still to be provided in many of the newly allocated sectors. Without basic amenities, one cannot expect these areas to get populated. This non-occupation of ready to move in projects has a cascading effect on the commercial segment, as retail market places or malls would only take off when there is residential occupancy in the area.
On the other hand, the Golf Course extension road has a number of overly delayed projects. There are some big names and MNCs involved who have miserably failed on their delivery dates. Issues like demerger of EMMAR-MGF have also affected the construction in the area.
Overall, combination of a lethargic and indifferent administration coupled with ill planned projects by the builders have contributed towards the present mess which the real estate sector in Gurgaon finds itself.