Gurgaon price trend prediction

Returns in Gurgaon will keep pace with inflation, Rupee depreciation and stock market returns from now on.

If inflation remains muted, if stock market stops moving up or goes down and Rupee remains strong in next 2 years, expect stagnant prices with no appreciation.

In the long term, expect 15-20% annualised returns in Gurgaon property. I have no dout that property in good locations will outpace stock and FD returns by a comfortable margin.

As for Delhi, DDA flat rate is 10,000 psf. Builder floor is depending on location, nothing less than 10,000 psf in good location.

And anybody selling land for <3L psy is a fool - or cheating you with unclear title

On India's Space Program

Unfortunately, our space program is misplaced priority. All these scientists and engineers working on Chandrayan etc should have been put to work in setting up a proper ballistic missile delivery system for our nukes - where we badly lag both Pakistan and China.

Our only spece ventures should be military satellite systems and spy satellites.

Currently we dont have a credible nuclear delivery option, making us very vulnerable to conventional attack with threat of nuclear war. Most of our missiles are 2 decade old technology which doesnt even work properly.

People just dont know what they are doing in our govt funded space program. We can make more money by exporting Hero Honda motorcycles, which are of excellent quality viv-a-vis Chinese, than by trying to monetise our space program which is basically capital destruction with no viable return.

Please remember that most of out IIT graduates do not join our space program or even BARC - they mostly sell biscuits or insurance - because the money is there. Our space and atomic programs run totally on second rung colleges and physics students from whom the best are picked up with superhuman efforts from the HR departments sifting 2-3000 graduates to select one capable person. The people (engineers) who enter pvt sector here are all overqualified and capable - they are attracted with big salaries because pvt people dont want to interview 1000 people to find 1 gem. But BARC is forced to do this. oOr brightest minds wrestle with selling biscuits and buying up overpriced real estate.

If I was running the country, I would ban our IIT engineers from leaving the country or working in unrelated fields. And I would put security needs over boasting rights - which is all our space program is about.

Our Prithvi, Agni basically dont work well. Pakistan has much smaller solid fuel propelled missiles capable of hitting anywhere in India. We do not have the specialised hardened silos needed for surviving a nuclear attack on our missile sites and lauch second - survivability is just not there.

Currently our nuclear deterrent is based only on attack planes and disassembled airplane bombs - we do not have good designs for missile launched nukes.

On commercial property

With inflation, rental yield will go up. 50psf is average rent today i.e. 20,000 pm for a 200sf shop.

100 psf will become average in a couple of years i.e. 40,000 pm for the same shop.

Capital values will rise less, because FD interestrates will be higher and so capital values will less than double with doubling of rental - so that rental yield will be say 17 or 18% of your capital invested.

Asset allocation for TODAY

Hi Amit 001,

I dont think Gurgaon prices will correct. These prices are here to stay. They may go up or stay same, but will not come down.

I think they will stay same, but that is a guess. If stocks outperform like this, RE will bubble up like anything.

If I had 100Rs in cash, TODAY, I would
1. Put 30% in bonds
2. 30% in stocks
3. 5% in gold etf
4. 20% in plots in Faridabad
5. 15 % in commercial RE in NOIDA (like JMD or JP, provided I had some 3-4 Crores and could go for commercial with ticket size of some 50L. Otherwise put 15% in liquid funds and wait for opportunity - probably a flat booking in 2012 or 2013, when global and local scenario is clear

Dwarka Eway Projects

( Hey Venky, Which project you would choose on Dwarka e way for investment. Exclude luxary projects. Budget : 35-40 )

Closest to Delhi is probably best - so Shilas is probably best.I personally prefer Ramprastha because of triple connectivity.
1. Dwarka Eway,
2. Existing Gurgaon expressway (once Hero Honda Chowk is built) - right now only one way connectivity
3. Thru it to Infocity and Sohna road malls
4. Basai Road to Jhajjar developments
5. Proximity to Sultanpur sanctualy and green area.
6. Reliance will probably make IT park there.
7. Water levels likely to be the best in this region because of green area.
8. Active construction by Supreme - delivery is 2012 is probable

Negatives:
1. Not for short term investment
2. Three infrastructure proposals only on paper - Dwarka Eway, Basai road flyover, Hero Honda Chowk flyover (which is why it is available cheap)
3. Lot of village houses nearby
4. Multiple ifs and buts are a negative - even if one fails to materialise, then prices will not equalise between Ramprastha and Sohna Road / MAnesar
5. Rental yield will be very low for 5-7 years - better for people who plan to keep it locked up.

But it is a 10-15 year hold - and while with this much hold you make money everywhere, when whole area is developed and commands similar valuation, only entry price will differentiate the investments - and 2800 psf is dirt cheap.

Psambher, there is huge land bank in the area. Many affordable projects will definitely come. But the whole corridor will be a highly urbanised area.

Ashish, Crescent Park is poorly located wrt Dwarka expressway. Much land bank in the area. Distance from Dwarka Eway, NH-8 and KMP is almost same - some 4-6 Kms. So Pataudi Road is the main road for this. It is a project for those who cannot afford Gurgaon prices.

Durbious, I agree, these prices of 2800 and 3000 psf are here for max 6m to 1 year. Then we will move to 3600 psf.

Guesswho, the Eway is expected by 2015, Metro will be parallel and expected by 2020 only.

On ATS village prices, NOIDA

Bhuwanb, RE cycle is 7-8 years, industrial cycle is 4-5 years.

But yes, alternate cycles deliver much bigger returns. Since 2003-2007 returned abnormal returns, 2015 returns will be more muted and 2023 will see the hydrogen bomb.

That means a holding period of 15 years or more. So if buying a flat, go for quality, because flats have a life and will deteriorate, otherwise buy a plot.

Re. ATS village, maximum price appreciation ocurred between 2003 to 2007, when the big bull run in property wqas on. From what I remember, prices were 1500 psf in 2003, 2500 psf in 2005, 3500 psf in 2006 (and this includes the construction premium) and 6000 psf in 2008. Now it is probably 5500-6000 psf - but there are no deals happening, so cannot judge.

ATS village turned out to be much better than Gurgaon Sohna Road - where prices were 1200 psf in 2003, 1600 psf in 2004, 1900 psf in 2005, 3000 psf in 2006, 4000 psf (plus) in 2007, 3500 psf in 2008, 3000 psf in 2009 and back up to to 5000 psf now, in Vipul Greens, which started around the same time.

Infrastructure, shops etc around Vipul Greens are much better now than around ATS village.

ATS sector 50 is much better actually, than ATS village.

Anyway - all this construction in NOIDA will actually give paradoxical returns to prices of ATS village for the next 20 years - because it will continue to be one of the best locations and societies. The more the area develops, the more the value of ATS village. The more the inflation (currently 15%), more will appreciate ATS village.

I expect prices to now move to 7000 psf and more very soon - when many of the new launches start facing delays in construction. In 2014, I expect it to be 10,000 psf which is south delhi DDA flat rates.

While your points are very valid, and prices of ATS may not rise, I expect otherwise. Because development of RE is very slow - other constructions will stagnate and not get delivered. End users will buy in ATS (no other options) and existing owners will not part with lesser price.So we will have scarcity in the middle of plenty. I have seen it happen in many places. Omaxe coming nearby is no competition, Unitech Grand is much delayed and JP is stagnating without progress.As I said before, when Grand and JP come up, there will be paradoxical elevation of ATS prices, because in premium property, the valuation is based not in supply and demand but on positioning - and ATS will command premium over Grand, JP pavillion and LB espacia.But for that, all the ongoing construction and chaos and dust have to go away. Will take some 5 years. By 2020 ATS village will still be the best in the area and will command great value.

BTW, when investing in flat, go for very small (1BHK or small 2BHK) or very large (>2000 sf). Both command better rent and resale value than usual average sized 2 and 3BHKs.

Price rise in big flats is not always true - prices rise in spurts. It rises only during a sudden jump in prices like what is happening now in Gurgaon/Mumbai/Pune and what happened all over India in 2006-7.

Big flats appreciate a lot during booms but their price drops a lot during a bust.

So you have to exit during a boom time and for many years you will not be able to exit, because price is not attractive. But in the peak of a property boom, big flats outperform smaller 2 and 3BHKs because you can charge a psf premium - since carpet area is much more than for smaller flats. People pay the premium for this.

On the other hand, it commands a better rent than 3BHK even in busts, because the people who rent such flats can afford it and there is a premium for its size.

29.9.2010

Kube is a good price. Main problem will be excruciatingly slow execution.

Having said that (so that thread is not highjacked) I must say few things.

1. Distance in expressway is measured in time from exit. If there is no exit on expressway, Greater NOIDA will be closer to Delhi than both JP NOIDA and Unitech Grande (if both are approached from sector road rather than expressway).

2. Expressway without toll will degenerate to NH24 like chaos - so toll is good and it will and should come.

3. Without expressway exits near 93B, LB is best located followed by Grand for Delhi people. JP not so good.

4. Risks with Unitech have gone now - they have funding, reduced debt and Grand will probably finish before time. This is not 2008-2009 when they had funding problems

5. JP has no funding risk but has huge execution risk - expect extreme delays (>5 years) in all except Pavillion, Imperial, Klassic and Kosmos.

6. Biggest delays expected in Kube :-), followed by Knights court, Kasa and least delay in Kensington.

7. JP has a very poor customer service dept - almost non-existent. Customers will be treated very badly - unlike Unitech. They are overstaffed and yet totally inefficient and near breakdown even with current customer base.

8. JP has been a B2B company - they are failing at B2C level - its not there in their company make up.

9. So your money is equally safe in JP and Unitech currently. As pointed out, JP is less exclusive than Unitech althoughsame psf price. Some people (like me) prefer a more friendly middle class crowd and would prefer JP over Unitech - where you will live and die without ever meeting your rich neighbor.

LB is best for neighbors - all techie crowd. JP has more of non-techie crowd.

I would not wait and watch till Diwali for buying in NOIDA - these prices are here to stay and can only go up from here, seeing how stock and RE markets are behaving.

Looks like there has been massive absorption of the new NOIDA launches - even if not, builders are back to their game of increasing prices every 4 months just as a tactic.

My view on Kundli: Poised to take off

Nitin, (planning to sell plot in Kundli and buy in Gurgaon) dont be crazy, hold on to your 240 sy plot in Kundli. It will be appreciating like crazy very soon - unless it is in a very interior place in Sonepat and is badly located. Even then Sonepat is worth holding Also, roads are now better and the area will take off in a year or two. Expect to sell for 35-40ooo psy in 3 years or so - maybe even more, going by the sudden pick up in interest in Kundli in the last month or so.

Kundli is poised to leap, just like Manesar did some 6 months ago.

For own use, live on rent - it is vey cheap. Get a Sohna Road plush 4BHK for 20,000 pm and live well.

And buy a second plot from your salary in Manesar. In Gurgaon the rates are already very high and will appreciate less as a percentage than in Kundli. Gurgaon will be a market performer, Kundli will be an outperformer, using stock market terminology

Hi Capsreal and AMit.

At the end of the day, Kundli will not be the next Gurgaon. Thats for sure.

Kundli and Gurgaon are in Haryana - so there is no way policy action will attract IT/manufacturing.

Only thing going for Kundli is abundant land all around it, still cheap compared to Rohtak, Gurgaon and Faridabad - and excellent connectivity better than Rohtak.

Because entry price is lower, Kundli is a good long term hold at 1/3 rd Gurgaon price - In 3 year time frame the return from Kundli may be higher in percentage terms because of catch up effect. In long term 10-15 years, returns may be similar in percentage terms.

I dont see Kundli being a laggard unlike Daruhera, Greater NOIDA etc. It has a position advantage in being the only such place in the north