Gurgaon, the industrial city bordering Delhi, is buzzing with ‘trophy homes’, at least 3,000 of them with a price tag of Rs 5 crore or more. It’s as if the ‘slowdown’ has given this glitzy city a miss, well almost! ‘Trophy homes’ refer to luxury residences with spectacular views or other extraordinary amenities.
Of these 3,000 luxury units, around 1,500 to 2,000 apartments and villas were added in the Gurgaon market in the past year itself, according to IndiaHomes.
Developers, from small to big, are in the high-end game. Sobha, BPTP, M3M, Emaar-MGF, Unitech, Krrish, Puri, Vipul, among others, have all come up with projects priced up to Rs 10 crore. Vipul’s Tatvam has units pegged at around Rs 6.5 crore each, Emaar-MGF’s Marbella is selling at Rs 5.5-6 crore and its Palm Springs at Rs 9.5 crore, Unitech’s Uniworld Villas are going for Rs 7-8 crore, and M3M’s Golf Estate at Rs 4 crore. Analysts point out the pioneer in the luxury play in Gurgaon was DLF. Aralias from the DLF stable, launched way back in 2002-03, has seen a 15-fold jump in value, from Rs 1,800 per sq ft ten years ago to Rs 30,000 sq ft now, prompting many developers to join the race for luxury projects.
| TROPHY HOMES Despite the slowdown and the trend of affordable housing, Gurgaon is buzzing with high-end housing projects | |
| Rs 5 cr Project The Eiffel Developer Krrish | Rs 6.5-8 cr Project International City Developer Sobha Developers |
| Rs 4 cr Project Golf Estates Developer M3M | 6.5 cr Project Tatvam Developer Vipul |
| Rs 7-8 cr Project Uniworld Developer Unitech | Rs 9.5 cr Project Palm Springs Developer Emaar-MGF |
| Rs 2.5-10-cr project Diplomatic Greens Developer Puri Construction | |
| Source: Industry | |
Developers argue it is more to do with the the high land cost in Gurgaon which is driving the prices up, leaving developers no room to do affordable or mid-end in the region, in addition to the overall increase in affluence of people settling down in this part of the country.
Puri Constructions which has Diplomatic Greens in Gurgaon, priced between Rs 2.5 crore and Rs 10 crore, says the demand for a particular category depends on the affluence level of the people settling in. “The phase-I of our project is sold out while the phase-II is 80 per cent sold,” said Arjun Puri, MD, Puri Constructions.
For a person to buy a house priced at around Rs 4-5 crore, his/her income has to be a minimum of Rs 30 lakh per month, said Sanjay Sharma, managing director, Qubrex. He added majority of these units are bought by investors rather than the end user and rented out at Rs 3 lakh per month or more.
Demand for high-end housing has also got to do with the fact that companies are moving out from Delhi’s prime shopping and office complexes to Gurgaon, creating a demand for residential real estate.
J C Sharma, vice-chairman and MD, Sobha Developers, who launched the phase-I of International City in Gurgaon last year, priced between Rs 4.5 crore and eight crore, said it is the land price which has escalated in the areas and low FSI (floor to space index) that does not leave the developer with much option but to sell at a higher price. “Land price in Gurgaon is about Rs 5,500 per sq ft in some areas and add to that the construction cost of Rs 3,000 per sq ft. So, a developer cannot sell any project for less than Rs 10,000 per sq ft in Gurgaon, forget affordable housing”, he said. He said the FSI at 1.75 for group housing and 0.5 in plotted and villas is too less. According to him, he has sold all 199 units of phase-I and recently launched phase-II of the project.
The developer has priced phaseII at least Rs 60 lakh higher than phase-II. On luxury selling even in these times of slowdown, Sharma said, “of course there is a genuine fear among the developers at this point, but then the demand hasn’t slowed down at least in the luxury segment.”
Developers’ strategy is an converse of the 2007-08 slowdown. While developers were on record saying they were exiting luxury and entering affordable, they are back to focusing on high-end housing along with the plotted one, even as the slowdown has returned to haunt them.
“DLF in 2007-08 saw the price of the project Pinnacle fall from Rs 7,000 per sq ft to Rs 4,600 sq ft, sending shivers down the luxury market, but it has recovered well since”, said Sanjay Sharma.
Why this change? Puri said though there is an economic slowdown, people’s affluence has grown. Also, almost everyone got a salary hike this year, despite the odds. Moreover, once you have earned enough, you want to invest in a good house, Sanjay Sharma added.
Luxury demand was never too high, so it is stable in a way, said Samarjit singh, MD , IndiaHomes, a superbrokerage firm. He added his premium customer team, that deals with high-end luxury units, gets as many as 22,000 queries a month, of which 220 translate into transactions. Around 30-40 among these are from Gurgaon.
