Notwithstanding the precipitating trend in the property rates in Gurgaon for the last several years, the rates are reportedly at stagnation now. Primarily owing to the global economic meltdown, this nascent phenomenon is triggered by other indigenous causative factors also. Though widely perceived as transient and ephemeral, the trend has cast a somber shade in the otherwise scintillating arena.
Market pundits have been predicting such stagnation in property rates in Gurgaon for the last several months. As a matter of fact, the waves of the downturn in the global economic scene have reached the Indian sub-continent and its effect is reflected through umpteen manifestations. Take the case of square foot value of flats in the prominent locations of South City and Sushant Lok in Gurgaon. The current rate may vary between Rs.7,000 and Rs.9,500 per square foot and the same rate has been prevailing for the last one year.
Insiders in the property industry in Gurgaon allege other causative factors catalyzing this stagnation. Some attribute it to the stagnation in the capital market. They say that currently the capital market is undergoing a slump and hence the property segment is also facing a lull, but it is a transitory phase. However, their optimism exudes confidence that in the near future real estate business in Gurgaon will recoup its erstwhile vigor. Furthermore, insiders concur that there has been no notable decline in the number of individual transactions, but investor purchases have plummeted to the nadir.
There is another perspective to this slump in the property market in Gurgaon. It is based on the premise of the supply-demand theory. A number of landmark projects that had been under development and in the pipeline for long were completed and were in offer for sale during the previous year. Naturally, the law of demand will apply—the more the supply, the less the demand.
Insiders in the industry say that of late the consumer behaviour and preference have undergone a radical change in the Gurgaon property sector. Previously, the bulk of the buyer population preferred the HUDA units. Time has changed and investment options are aplenty. With banking and financing companies scouting for customers, most may opt for a loan to purchase a premium flat.
The global economic meltdown along with certain regional causes has caused a slump in the property market in Gurgaon. Completion of some mega projects in recent times has caused an excess supply resulting in low demand. Investor reluctance has made the property rates and demand at stagnation.