Is It The Right Time For Home Buyers To Invest in Delhi?

Home buyers in NCR have much to rejoice about as prices have fallen to a good extent in the area. There are as many as 1.93 lakh apartments lying vacant across the NCR, which would take almost 3 years for builders to clear. Therefore, not only do home buyers have bargaining power over the price of the property but also sufficient choices to select their home from.


Research has recently showed that the sales of property in Delhi and NCR have dropped by 43 percent almost. This is one of the worst performances displayed by the area in the real estate market in the past decade. There are several reasons for fall in sales of housing property. The top few have been listed below:

1.      Slow economic growth

2.      High inflation

3.      High rates of interest

4.      High property rates

Because of the slowdown in the property market, developers have been forced to slash their prices. Flats for sale in Delhi neighbourhoods such as Mayur Vihar and Dwarka are available for Rs 55 lakhs or so in resale. These flats are of 2BHK configuration. For a new apartment of this configuration, one would have to spend Rs 65 lakhs almost.

It seems the price correction was much needed as property prices had skyrocketed in Delhi in the past couple of years. Delhi was the most expensive city for purchasing real estate in India even a few years ago. Now, even in prime neighbourhoods like Panchsheel Park, South Extension and Vasant Kunj, where mostly resale flats are available, prices have staggered considerably.

Apart from the correction in prices of property, there are a couple of other reasons why investors and home seekers should consider properties in Delhi.

1.      Downside risk of pricing in metros and Tier II and III cities have lowered to a good extent. This has happened after the ascent of the new government in the Centre. From here onwards, it is predicted that property prices would increase by almost 8 to 10 percent. The sales volume for properties shall also recover in this period. Infrastructure and land development shall also spur a growth of demand for properties and their support prices.

2.      Lower interest rates: High borrowing rates was one of the reasons why home seekers averted property purchase. However, the RBI has already initiated several cuts in repo rates to encourage more people to take loans. Also, the government has increased the exemption limit on home loan interest payable to Rs 2 lakhs from Rs 1.5 lakhs for self-occupied property. This will help consumers save tax on flats for sale in Delhi.

3.      Growth of the Economy- The government has adopted several initiatives such as Make in India and easier land acquisition for industries to revive production in the country. This would lead to an increase in employment and hike in salaries as well. With an increasing purchasing power, more people would be able to purchase properties. The finance minister has commented that they look forward to a sustained rate of growth at 7 to 8 percent over the next 3 to 4 years. This has given much hope to investors in the real estate market.