Gurgaon may lose its realty sheen

With the Manesar-Gurgaon Urban Complex 2031 getting approval from state level committee recently, real estate investors have started putting their bets on the growth story of the Millennium City, which is home to 16 lakh people, hundreds of MNCs and 43 malls.

Despite the oft-repeated success story of Gurgaon, it has now started getting criticism for its exorbitant realty prices, ultimately forcing genuine buyers to shy away.

“Small companies can’t afford to set up base in Gurgaon anymore. They either move to Bhiwadi (Rajasthan) or elsewhere in Haryana,” said Deepak Sharma, a property consultant and till recently vice president of Raheja Developers.

Not only commercial buyers but residential buyers are also getting averse to buy properties in Gurgaon as overpriced properties compel them to look in Dharuhera (a tehsil in Rewari) or Sohna (one of five tehsils in Gurgaon district).

Sharma said the master plan, which has earmarked 48 sectors in Sohna, had a handful of sectors only two years ago, but land allotment is being done aggressively. “Some builders have already sold properties there and investors (not buyers) have invested there with a hope to leverage the anticipated hike in real estate price. But I doubt if Sohna has so much potential,” said Sharma.

Anckur Srivasttava, chairperson of GenReal Prperty Advisers, also echo the same sentiments. “Sohna is very far for people working in Delhi or Gurgaon (22 km from National Highway 8). Why would people buy properties there, that too if they are overpriced? The prices are preposterous,” he said. “In another 24-36 months, one will not find any housing unit for less than one crore rupees.

This will spell disaster for the entire market as the city grew because of advent of MNCs in 2007 (after GE Capital International Services set up its BPO, triggering an exodus of companies from Delhi to Gurgaon). But with such unreasonable rates that range from Rs 12,000 to 15,000 per square feet on Golf Course Road, these MNCs will be forced to scout for cheaper avenues at other places.”

A State Bank of India official working in the home loan segment told Deccan Herald that over 60 per cent of the buyers in Gurgaon are investors and not end-users. “Properties artoo expensive to be bought by a middle class person. At times 80 per cent of home loan queries come from investors who wish to partake the appreciation in properties here,” said the manager, requesting anonymity.

J L Gupta, a 60-year-old man who came with his son to look for a house in Gurgaon at a property fair held recently in Epicentre in Sector 44, was baffled to realise that all properties are beyond the reach of his pocket.

“If my son buys a house at the current price, he will have to pay an EMI of Rs 80,000, which is more than his monthly salary,” he said. Gupta’s house in Mayfair Garden, which he bought in 2006 for Rs 25 lakh, is now valued at 85 lakh, he says.

Real estate fund managers, however, say that there are still buyers and there is no decline in the interest of investors. V Hari Krishna, director of Kotak Realty fund, said the master plan is futuristic and there is no apparent flaw. “Prices may have increased in the residential segment, but office rentals are more or less stagnant. So, for corporates, the Gurgaon market is still a draw,” Krishna said.