Daybreak - Sky-high real estate prices in Delhi NCR are making even the well-off feel broke

Episode Date: September 11, 2024

The real-estate market of Delhi-NCR is an anomaly. The Ken spoke to a bunch of potential homebuyers who are looking for premium apartments with budgets of up to 2.5 crore rupees.  Real-estate experts are telling them to give up on their dreams. Lately, the national capital has been facing an acute supply crunch of new housing projects, especially in the mid-premium segment (80 lakh to 2 crore rupees) depending on the city.   Delhi NCR has witnessed the sharpest fall in inventory in this segment in the last few years.   Real-estate prices in turn have shot up far beyond the reach of most buyers. But it’s not like demand for housing has gone down because of these sky high prices.  People are still buying tens of thousands of these mid-premium houses in and around Delhi.   So the obvious question then is: why aren’t more residential housing units being built?  From listeners: Praveen: Partner (2007)Sravan: The InternAnish: Lord of the Rings trilogyFrom hosts:Snigdha: The Perfect CoupleRahel: Call Me BaeDaybreak is now on WhatsApp at [phone]. For next Thursday's Unwind, send us your recommendations to us as texts or voice notes. The theme is "comfort food from your favourite spot in town."

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcast, you've probably heard me, my interruptions, my analogies and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission. We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture,

how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. When 36-year-old Samir Rana started hunting for his dream home, he thought, how hard could this be? Most would say that Samir is living the dream. He earns a cool $3,000 a month as a software developer in Gurgaon, he makes smart investments, and he even drives a BMW. But despite all of this, lately he's been feeling rather inadequate financially.

And that is because he recently realized that the two-craw budget he had set for himself would not be enough to buy the house of his dreams. Maybe it would be in any other city, but definitely not in Delhi-NCR. His requirements are simple. He wants a luxe home with a carpet area of about 2,000 square feet. It's been three months since he began house hunting and he has found nothing so far. Now, if Samir were looking for a house in any other posh locality of India's many metro cities, he would have been flooded with choices.

But the real estate market of Delhi NCR is an anomaly. As you may have guessed by now, Samir is not alone. The Ken spoke to a bunch of potential home buyers who are looking to buy premium apartments like Samir with budgets of up to 2.5 crore rupees. But real estate experts are telling them to give up on their dreams. You see, the National Capital Region has been facing an acute supply crunch of new housing projects, especially in this mid-premium segment. That, by the way, is a casual term for houses that are priced between 80 lakh rupees and 2,000. depending on the city.

Delhi NCR has witnessed the sharpest fall in inventory in this segment in the last couple of years. And of course, the unfortunate byproduct of the shortage is that real estate prices have shot up far beyond the reach of most buyers. But the interesting thing is that the demand for housing has not gone down because of these sky high prices. People are still buying tens of thousands of these mid-premium houses in and around Delhi. So the office question then is, why aren't more residential housing units being built? Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nidhar Sharma, and I don't

chase the news cycle. Instead, every day of the week, my colleague Rahil Filippos and I will come to you with one business story that is worth understanding and worth your time. Today is Thursday, the 12th of September. Sharon Gupta and Samirana have a few things in common. both work in software and they live in Delhi. But most importantly, they're both looking for the perfect 2,000 square feet apartment. And just like Samir, Sharon too, has not had much luck. My colleague, the Ken reporter, Rona Kumar Gunjin, met him during his house hunt. They visited Kalpitaru Vesta, which is an under-construction housing society in Noida.

At first, it seemed to fit the bill. They were blown away by the temperature-controlled indoor pool, the massive clubhouse, the greenery, But then Sharon saw one of the four BHKs on offer and it was far from what he had expected. The bedrooms were smaller than he had imagined. The balconies were larger than necessary and the kitchen was cramped. The final nail in the coffin was the asking price, a whopping 5 crore rupees. That was 150% above his budget. The thing is, the area where he was looking, which is Noida's sector 128, is not even a portion.

part of town. It is at least 30 kilometres away from central Delhi. The airport is an hour and a half away. Even the nearest metro station is 5 kilometres away. And yet, the builder was charging nearly 19,000 rupees per square foot. Sharon had seen enough. So he hopped back into his SUV and went to see another prospective apartment. This one was in Godridge Tropical Isle, which is a housing society in Noida's Sector 146. Here too, the price made sure. Sharon's hard sink. The flat was even more expensive, six-cccccccc with similar dimensions. You know, a report by Anna Rock found recently that nearly 62% of newly launched housing units in NCR cost more than 2.5 crore rupees.

Compare that to cities like Bangalore and Pune, where less than 5% of new units crossed that price range. It is the same story across mid-premium properties in Delhi. Ronok met another buyer, a man named Naman Malotra. He was hit with a similar price tag at an under-construction project by the builder Soba in Gurgao's sector 108. Naman was understandably frustrated by the whole experience and he had a simple question. What gave builders in Delhi the confidence to jack up prices like this? Stay tuned to find out. The thing is, buying a home in the national capital region is not for the faint-hearted.

And I'm not saying this just because of the real estate prices that we are seeing today. This has been going on for decades. Defaults from over-leverage builders, decade-long delays, and in some extreme cases, you pay for a house that never gets built. The most high-profile cases have involved known local builders like JP, SuperTech and Armapali.

They have seen tens of thousands of undelivered units. Just imagine all those people who must have invested lakhs and lakhs of rupees, some cases even crores of rupees years ago and their homes still have not seen the light of day. Now, in most major cities, nine out of ten projects are typically developed by local builders. But in Delhi, a lot of these local builders are now tied up in serious lawsuits. And as a result of this, the national capital's supply of new real estate, particularly in the mid-premium segment has fallen drastically. So, of course, this was an opportunity for outsiders to enter the picture.

Builders like Kalpitaru, Godridge, Soba and Tata have been taking on more and more projects in the national capital, and they're all from outside Delhi. But the thing is, with all the local builders out of the picture, there is a serious lack of competition, which means that these outside builders have a free power. to charge whatever they want, which is why real estate prices have more than doubled in the recent past. And prices are not going to come down anytime soon. At least that's what two senior officials at the Greater Noida Authority which auctions lands to builders had to see. Last month, the highest bidders for three land parcels in Greater Noida were the two non-Dellie-based brands,

Codridge and Shoba. This was a new record. It is the most expensive landings. ever sold across all auctions in Greater Noida. There's also another new player in town. A new generation of local builders have also entered the scene now. And like the outsiders, they are going all out with premiumization. More on that in the next segment. Remember Sharon? We spoke about how he was looking for a home in Noida a little while ago and how everything

was out of budget for him. In fact, two to three times more than his budget. Well, even after string of disappointments, he continued to hunt for his dream home. So, what happens when you bring two crore rupees to the Delhi NCR house hunt? After consulting with his broker friends and watching several YouTube videos, he was convinced that he had to avoid projects developed by non-NCR builders. But this left him with only a handful of options, one of which was Ska Destiny 1. It is built by a relatively new local builder and is located right at the eastern edge of NCR.

Like Sharon, a lot of middle-class buyers are now seeking out lesser-known developers. And in their search for affordability, they are quickly realizing that nothing is truly affordable. Ronuk visited four more under-construction projects in the area by local builders like Elite X, Spring Elmas, Irish Platinum, and fusion the brook. Most buyers there knew little about these builders, past projects or the possession status of older units. Their focus was simply to find a flat in the 1.5 to 2 crore rupees range. But these flats are not a lot cheaper than the ones constructed by outside builders.

Although not as high as Godridge of Soba, but there wasn't a single 4BHK under 2 cro A 2,000 square feet flat that costs 6 crores at Godridge now costs well over 2.5 crores with local developers. And they're all using the same language as these other big builders. Throwing around words like luxury, premium, laid back lifestyle, you get the drift. It is a trend here in India and I'm sure you've seen it in your city as well, more so in NCR. One real estate agent told us that it is a great way for builders to ruthlessly jack up prices. Unfortunately, Sharon eventually decided to pause his hunt. Most real estate agents in the capital say that the prices will stay inflated.

Houses are not going to get any cheaper. But if Delhi's elite are struggling to purchase their dream home, where does that leave everybody else? Think that I have a confession to make. Oh my God. Tell me, child. I really enjoyed Call Me Be and I didn't think that I would be admitting to this

on a podcast that's listened to by like thousands of people on a daily basis but here I am being vulnerable with all of you and admitting to the fact that I thought it was kind of funny okay that was the last thing I expected I thought you were going to come and be like forgive me

forgive me sister because I have sent him but But okay, tell me about the show. Okay, I think by now everyone knows that this show is on Amazon Prime. It's starring Ananya Pandey. And it's supposed to be about privilege and what happens when privilege is taken away from you. But in the most, like, slapstick Bollywood way possible. I have not even slapstick.

I mean, that's an unfair kind of assessment. But they've taken elements from a bunch of different shows. So, Emily and Paris, two broke girls. And they have ruthlessly copied. in that sense. But they've done it in a way where it almost seems deliberate and like satire.

Interesting. Yeah, like are the dialogues the best? Is the acting the best? Does the storyline make sense? The answer to all those questions is no. Okay, not at all. She, so Ananya Panday, I'm not going to give too many spoilers.

Yeah. But there's not much scope for that also. I won't give spoilers. Ananya Pandey's character and you see this in the tree. trailer as well. She gets somewhat disowned by her very rich family.

Her marriage falls apart, this very rich businessman, and she has to rebuild her life in Bombay. So what does she do? She becomes a journalist. Of course. Okay? Yeah.

And she's working with this news channel and within what feels like a couple weeks of working there, she gets this crazy scoop. Okay? One crazy, like one investigative Pulitzer Prize winning type of scoop she gets. Okay? In two weeks. It's like all of that.

Like all of that is happening. She's dealing with like, you know, no privilege anymore and becoming a journalist. And like somewhere in the story there is also this thing about her. Like mental health struggles, things like that. Lots of different, different things were happening all at the same time. And I loved it. I watched the whole thing in one night. Saturday night, full night was spent watching Call Me Beat.

Wow. Wow. Amazing. But, you know, that actually, you know, let's talk a little bit about the idea of cringe. And what about it appeals to us so much? Like, why are we so obsessed with cringe content lately, especially on social media? What do you think? I think it's just a nice escape. Like, especially when you have an intense job, when you, where you feel like you have to think and, you know, seem really smart and put together and say the right things. and whatever, all the time. For me personally, I like going home and consuming content where I don't have to use my brains at all.

I just want to switch off. I want to watch something. I want to giggle and I want to go to sleep. That's all I want. No, no, that's very relatable. And actually that this whole story is reminding me a little bit of another cringe show that I loved watching. I watched all the seasons, even though it was so bad.

Four more shots, please. Remember? Yeah, I remember. Shiny Gupta and I forgot. Bani. Right, right, Barney was there. Yeah. And, but, you know, I think cringe means a lot of things.

It's not one thing. But also there's this whole aspect of like, you know, it makes you feel better to see somebody else making a fool out of themselves. Yeah. Right? It just makes you feel like, okay, it's like this weird validation that you get. I don't know. For me, I don't even think it's validation.

I find it relatable wouldn't be a fair. I don't relate to Ananya Pande at all. But like, I don't know. It's fun seeing people, like you said, not be smart, put together, funny, perfect, whatever, you know, all the time. And just be basic. I don't know why mainstream has got a really bad rep.

That is true. You know, and the reason that we're having this conversation at all is because I've spoken about this with Sikda as well. You're listening to Daybreak Unwind, where we come to you with our recommendations and I'll be honest with you, I want to be vulnerable here and say it's difficult. Okay, coming up with that perfect recommendation, right?

Because it has to be like, you know, somewhere there's this pressure for it to be like this obscure indie, you know, tick all those boxes. Yeah. But why should it? Yeah, it doesn't have to be like that. Yeah. Okay.

Jesus, Nika, do you have a mainstream recommendation for us today? I actually do. I recently watched this TV show on Netflix called The Perfect Couple. And it stars Nicole Kidman. And Leve Shreber, that guy who played Wolverine's brother. And some Wolverine movie. I'm sorry. But he's a good actor.

It also has Dakota Fanning and it has Ishaan Kattar. Oh. Yeah. Yeah, I've been hearing so much about perfect couple. Again, something that I'm going to watch next weekend. It's like, you know, it's got this very White Lotus vibe. Did you watch White Lotus? I loved White Lotus.

It's such a good show. It's definitely not even close to... It's like murder mystery. Yeah. It's not even close to White Lotus. But, yeah, it's this murder mystery. There's this huge lavish wedding happening. Nicole Kidman, Leave Shribura, the husband and wife.

And their son is getting married. And he is actually... And obviously they're a very rich family. But the girl that he's marrying does not come from a very privileged background. So it's a lot of like social equations coming into play, all of that. And then in comes Ishan Khattar. Yeah, and he does a pretty good job. He's a decent actor.

And also he is a sight for Soros. I mean, come on. It's quite young. Is that okay to say? Don't judge me paper. Okay, and that brings us to our first recommendation from a listener, Praveen, who told us to watch this Bollywood movie called Guess. Can I say it?

Say it. Partner. Okay, we've all watched it. We all enjoyed it. So, Praveen, I fully understand where you're coming from. It's from 2007. Rahil, were you born in 2007? Yes, I was born in 2007.

I was 10 years old. But, okay, so this movie stars my favorite Govinda. I love. Really? He is, you know? He's the icon of cringe, man. That's actually very true, yeah. No, in Bollywood?

Govinda and Salman Khan. Salman Khan plays this love guru. And he's advising Govinda how to win his lady love, Priya. It's H, no? It's the Hindu version of Hitz. Yes, it's a remake of this Will Smith movie called Hitch. Yeah. So, I can't get that song out of my head.

I don't want to sing it. Rajiv, can you play it? Also, we have another recommendation, which is also mainstream movie from Shravan. Thank you so much Shravan. He's recommending this movie called The Intern. Have you seen it? Yes. Anne Hathaway and Robert De Niro, right?

Yeah, I love it. It's so cute. Oh, my God. He's so used to watching him in Scurston. as he movies as like this badass gangster, you know. I love seeing him as elderly intern and like startup. It was so adorable. Yeah.

And we also have another recommendation from Anish and he suggests we watch the Lord of the Rings trilogy. It is my favorite. I do it twice a year. I do like a... Really? Yeah. L-O-T-R run like.

Whoa. Yeah. When? Like I had a specific time in the year or just... No, there's no specific time. Whenever you feel like. Yeah. Whenever I feel like.

But I always watch it. like commitment. It's beautiful. Like all so much of like mainstream fantasy fiction and movies that you see like inspired. It's so inspired. Like Harry Potter so much stuff is lifted

JK Rowling has. If you know you know. Exactly. Like JK Rowling lifted so much from LOTR. Okay. Thank you so much for writing into us. It's been such a joy hearing from all of you getting our messages, your voice notes.

engaging with you guys. We've chatted with a bunch of you in the last three weeks and it's been so great. But now that we're taking daybreak unwind forward, we want to try out a theme. Yeah, for every episode. For every segment of daybreak unwind. And next week, the theme that we want to kind of follow

and we want you to stick to is comfort foods at your favorite restaurant. Yes. So that go-to meal that you really seek out at the end of a hectic week, you know, the kind of thing that you crave, maybe at midnight, anything at all. Send us your recommendations as a text message.

Voice note would be great. You know the number. We'll be putting it in the show notes. Yeah, but before we go, I also have one request for our listeners. We had this whole discussion about cringe content, right? I would love to hear what's your idea of cringe. Why do you think we love cringe so much?

That's awesome. Yeah, that's it. And that's a wrap. Thank you.