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It was just some time back, premium properties in Gurgaon clocked an appreciation of about 50% in a short period of just 18-24 months for its investors. Gurgaon had become a benchmark in the country for its capacity to generate astounding returns on investments. But market dynamics have turned the tide today.
Earlier, newly-launched premium housing projects attracted the attention of High Networth Individuals (HNIs), NRIs, corporate honchos and businessmen. Take DLF Icon, for instance . This residential project was launched in 2004, offering apartments at Rs 2,750 per sq. ft. A couple of years down the line, property values here reached the staggering level of Rs 4,900 per sq. ft. An appreciation of 33.48 per cent over the launch price!
However, markets entered consolidation mode in the period between 2006 and 2007, and the subsequent impact is pretty visible. Property value at this development rose at the rate of a meagre seven per cent, peaking at the level of Rs 5,250 per sq. ft. in 2006-07 . Similar is the trend at other residential properties in Gurgaon that were launched somewhere in 2003-2004 . The Eros-Grand Mansion that was launched in 2004 with its apartments priced at Rs 3,400 per sq. ft jumped to Rs 5,300 per sq. ft in 2006, generating returns of 26 per cent a year, settled at Rs 6,300 per sq. ft in 2007, 16.67 per cent return over the property value in the preceding year.
Definitely, the appreciation in value was not as high as earlier but decent enough to keep the ball rolling from the investors’ point of view. Look at Alpha Buildtech’s Gurgaon One project, which was launched in 2004. This also managed to clock an impressive appreciation of about 10 per cent in 2006-07 . The group had sold all its 240 apartments, penthouses and villas at an average launch price of Rs 2,000 per sq. ft within three months of launch. This reached Rs 3,800 per sq. ft in the next couple of years, registering an increase of some 90 per cent and then settled at an average of Rs 4,200 in 2006-07 .
Similarly, residential units at DLF Royalton also managed an appreciation of 4-5 per cent in 2007 over the preceding year. According to industry sources, the units at this project launched in 2004 were selling at Rs 3,250 during the launch year and moved up to Rs 4,700 per sq. ft in 2006, marking an appreciation of about 45 per cent in two years. Currently, these values hover around Rs 4,800-Rs 5,000, inform sources. |