Is this the right time to buy a flat in Delhi

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A comprehensive analysis on whether this is the right time for a flat to buy in Delhi:

Current Real Estate Scenario in Delhi

The Delhi-NCR real estate market is witnessing a strong revival after the pandemic-induced slowdown. Several factors indicate that this could be an opportune time to invest in a property in Delhi:

Rising Demand and Sales

  • Housing sales in Delhi-NCR reached a 10-year high in the first half of 2023, driven by pent-up and bottled-up demand.
  • Developers launched over 34,500 new units in H2 2022 and 29,700 units in H1 2023 to cater to this rising demand.
  • Areas like Dwarka Expressway, New Gurugram, Sohna Road are seeing high traction due to improved connectivity.

Price Appreciation

  • Property prices in Delhi-NCR rose by 6-10% quarter-on-quarter and 12-15% annually in Q3 2023.
  • Certain micro-markets like Golf Course Road in Gurugram saw a 21% year-on-year price hike in Q2 2023.
  • Areas along Dwarka Expressway witnessed a 46% annual price increase in Q2 2023.

Reduced Unsold Inventory

  • Unsold housing inventory in Delhi-NCR fell by 21% from end-2022 to June 2023, indicating a healthy market absorption.

Favorable Factors

  • Stagnant repo rates since February 2023 have brought relief to homebuyers.
  • New supply from credible developers is being rapidly absorbed by buyers.
  • Massive infrastructure development like Jewar Airport, logistics park, metro expansion is boosting real estate in Noida-Greater Noida.

Factors to Consider

While the current scenario seems conducive for buying a property in Delhi, there are a few important factors to evaluate:

Budget

  • Property rates in Delhi vary widely based on location, with premium areas like Greater Kailash, Vasant Kunj, Defence Colony quoting over Rs. 13,000 per sq.ft.
  • More affordable options are available in areas like Uttam Nagar (Rs. 5,250 per sq.ft), Shahdara (Rs. 6,950 per sq.ft), Mehrauli (Rs. 5,050 per sq.ft).

Location Preferences

  • Areas in West Delhi like Moti Nagar, Naraina Vihar are considered premium localities, while Uttam Nagar, Tilak Nagar are more affordable options.
  • In South Delhi, Vasant Vihar, Greater Kailash are premium areas, while Neb Sarai, Chattarpur are relatively affordable.

Investment vs End-Use

  • If buying for investment, areas offering higher rental yields like Vasant Vihar (16.8%), Hauz Khas (16.4%), Vikas Puri (11%) could be considered.
  • For end-use, factors like connectivity, social infrastructure, amenities in the locality should be evaluated.

Loan Rates

  • Current home loan interest rates from banks are around 8.5-9.5% p.a. Buyers should factor in EMI affordability.

Developer Credibility

  • Buyers should prioritize projects by credible developers with a good track record to mitigate risks.

In summary, with rising demand, reducing inventory overhang, and price appreciation, the current period seems favorable for buying a property in Delhi, especially in emerging areas witnessing infrastructure development. However, factors like budget, location preferences, home loan rates, and developer credibility need to be carefully evaluated before making the purchase decision. Seeking guidance from real estate experts is advisable.

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