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Realtors shrug off deadlock on NPR, move ahead with their projects
Tanushree Roy Chowdhury, TNN Dec 2, 2011, 07.57AM IST
GURGAON: The continuing deadlock on the northern peripheral road (NPR) project, or the Dwarka Expressway, has finally forced realtors to launch their projects in the area after waiting for long for a decision from the government.
As one travels along the stretch, there is a lot of dust being raised, literally, as several developers have finally started construction hoping the project will be completed by the time they start handing over possession.
However, according to market watchers, a rise in capital value will be marginal owing to factors like escalated construction costs, greater home loan interest rates and developers reeling under high debts, among others. Nevertheless, despite the uncertainty on the status of the NPR, projects in this region have been launched at a much higher market price in the recent past.
According to a spokesperson from Sobha Developers, though their project is not dependent on the completion of the NPR, their planning and development of the area will be fully successful only once the expressway is fully functional.
"There are alternative approaches to the area but the NPR completion would greatly add value to it (the project)," the spokesperson said. While other developers have made alternative arrangements like widening the roads which are alternative approaches to their sites.
"Our sites have excellent access from 30-metre-wide roads which are being widened to 60-metre-wide roads, so even in the most remote event if the NPR were never to come, we would still have excellent access," said Arjun Puri of Puri Constructions Pvt Ltd.
Talking about the coming year, Ashutosh Limaye, Head – Research & Real Estate Intelligence Service, Jones Lang LaSalle India said, "The absorption rate – meaning the ratio of sales over inventory in the market – is likely to be low, and the incidence of new launches will decline." Limaye clarified that "project-specific price increases can be expected across all sub-markets" – pertaining specially to projects that are being delivered or are nearing completion, unlike the status on the Dwarka Expressway which have a delivery date of latest by 2014.
In the Dwarka Expressway region, none of the projects are close to completion, but despite that the prices are increasing perhaps because of speculation on the Dwarka Expressway being completed sooner than later, feel market watchers.
"While rising home loan rates have exerted pressure on buyers, developers have been constrained by the rising costs of construction and debt. We are now looking at a scenario where both developers and buyers are impacted by adverse macro-economic factors," explianed the real estate analyst.
However, brokers in this region feel the key to unlocking the value of Dwarka Expressway areas is the successful completion of the expressway. Currently investment is being driven by isolated reports that the construction has either started, is on in full swing, or will be starting soon.
http://articles.timesofindia.indiatimes.com/2011-12-02/gurgaon/30467036_1_sobha-developers-npr-dwarka-expressway
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