Unveiling NCR's Real Estate Landscape: Insights From Knight Frank’s Report

In the first half of 2023, NCR's residential real estate market exhibited resilience, marked by unwavering homebuying demand.

Spotlight Desk

Updated on: 18 December 2023 3:05 pm

Unveiling NCR's Real Estate Landscape

In the face of global uncertainties and looming recession fears in major economies, India's economy emerged as a standout performer in 2022. Cementing its position as the world's fastest-growing large economy, India garnered positive attention as a potential alternative to China and as the globe's largest democracy.

As we transitioned into 2023 amidst ongoing global economic concerns, optimism about India persisted. The central bank's proactive measures, coupled with a downward price trend, spurred confidence in the country's economic trajectory.

Exploring the Resilience of NCR's Real Estate Market

In real estate, India witnessed a thriving market in 2022, with robust activity in both residential and office sectors. Now, as we delve into the insights provided by Knight Frank's comprehensive guide, let's dissect the nuances of the Delhi National Capital Region (NCR) real estate market.

Part 1: Unveiling Residential Real Estate Trends

In the first half of 2023, NCR's residential real estate market exhibited resilience, marked by unwavering homebuying demand. Despite a cumulative 250 basis points repo rate hike since 2022, the market stabilised and reached a decadal high, with 30,114 units sold—a 3% YoY growth over H1 2022.

Sales Landscape and Market Trends

Gurugram took centre stage, dominating sales volume at 52%, closely followed by Noida and Greater Noida at 32%. Although new launches moderated, a 4% increase over H1 2022 demonstrated continued market vitality. The market's inclination towards premium properties, with 65% of total sales above INR 10 million, reflects a discerning buyer preference.

Market Dynamics and Future Outlook

Despite an upward price revision (5% YoY growth in H1 2023), a healthy launch growth resulted in a 5% YoY rise in unsold inventory. Surprisingly, the quarters-to-sell (QTS) decreased to 7.2, signalling a robust demand cycle—the lowest since H2 2013. NCR's real estate developers are strategically acquiring land for future projects, and upcoming infrastructure upgrades are poised to fuel further growth.

Part 2: Dynamics of the Commercial Real Estate Arena

Thriving Against Economic Odds

Contrary to global economic challenges, NCR's office market thrived in H1 2023, setting a 14-year high in leasing volume with 0.5 million sq. m (5.1 million sq ft) of office spaces transacted—a 24% YoY increase over H1 2022.

Regional Breakdown and Emerging Trends

Gurugram maintained its lead in office leasing at 57%, followed by Noida at 33%. Notably, office spaces for India-facing operations comprised 49%, flexible spaces held 25%, and Global Capability Centres (GCCs) accounted for 22%, showcasing a notable trend in the proliferation of GCCs across key sectors in NCR.

The Rise of Flexible Workspaces and Market Dynamics

In H1 2023, flexible working spaces witnessed increased demand, expanding from 18% in H1 2022 to 25%. Despite the continuation of the hybrid work model, co-working operators are scaling up operations to cater to a growing segment of enterprise clients. NCR's skyline underwent a transformation with 0.4 million sq. m (3.9 million sq. ft) of new office spaces, contributing to a decreased office vacancy rate of 13.6%.

Highlights from Gurugram and Noida

Gurugram's Office Market Dominance

Gurugram retained its pivotal role, accounting for 57% of NCR's total transaction volume in H1 2023. Notably, Gurugram Zone A witnessed a minor uptick in average rents (1% YoY), with new office space completion reaching 23% of NCR's total.

Noida's Ascendant Trajectory

Noida showcased substantial growth in industrial property, representing 33% of total office spaces leased in H1 2023—a 60% YoY jump from H1 2022.

Occupier traction in sectors 16B, 62, 129, and 135 contributed to Noida's significant role, accounting for 64% of new office space completions in NCR.

NCR's Real Estate - A Beacon of Stability and Growth

In conclusion, the performance of NCR's real estate market in H1 2023 echoes strength and growth in both residential and office sectors. Key contributors Gurugram and Noida have demonstrated stability and adaptability, setting the stage for continued expansion in the coming years.

Buniyad's Perspective: "Despite economic challenges, NCR's real estate market remains a hub of opportunity."

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