The real estate industry in India has experienced an incredible growth in the past twenty years. Gurgaon, Noida, Mumbai, Pune and Bengaluru are some of the cities that have become property investor hotspots. However, not all projects will bring a lot of returns and some properties will not increase in value, even in prosperous cities.
This paradox raises an important question: Why do certain properties stagnate despite the overall market boom? Let’s explore the reasons with facts, case studies, and expert insights tailored for the Indian real estate market.
1. Location Disadvantage Within the City
Even in a thriving city, not all locations benefit equally.
- Case in Point: In Gurgaon, while Golf Course Road and Dwarka Expressway have appreciated significantly, older pockets with poor infrastructure like parts of Sohna Road saw slower growth.
- Properties near industrial zones, dumping yards, or high-noise areas often struggle to attract buyers.
Lesson: Micro-location matters more than the city’s overall growth.
2. Oversupply of Housing Units
When too many projects are launched in the same micro-market, prices stagnate.
- Example: The mid-income apartments flooded Noida Extension in the 2010s. The demand remained stable and the excess kept the appreciation small over a few years.
- Developers often overestimate demand, which leads to a glut and reduces resale potential.
Lesson: A balanced demand-supply ratio drives appreciation.
3. Poor Construction Quality and Developer Reputation
Buyers today are cautious and research-driven. If a developer is known for delays, poor quality, or legal disputes, resale demand falls.
- Fact: According to a 2023 Anarock report, nearly 36% of Indian homebuyers avoid projects with a history of delayed possession, even if the price is attractive.
- Projects with structural flaws or poor maintenance quickly lose appeal.
Lesson: Reputation of the builder directly affects long-term appreciation.
4. Legal Disputes and Ownership Issues
A property entangled in litigation rarely finds buyers.
- Example: In Delhi NCR, several land parcels are stuck due to disputed land acquisition cases, making properties on such land unattractive.
- Banks hesitate to finance disputed projects, which reduces buyer confidence.
Lesson: Clear titles and RERA registration are critical.
5. Lack of Infrastructure Development
Even if a city grows, certain areas lag due to missing infrastructure.
- Case: In Mumbai, areas like Mira Road appreciated slower than Bandra or Andheri for years due to poor road connectivity and lack of metro access.
- In Gurgaon, sectors without proper sewage, water, or metro connectivity see little demand.
Lesson: Appreciation follows infrastructure, not promises.
6. Mismatch Between Price and Demand
If a property is overpriced compared to what the location offers, it may never see growth.
- Example: Most of the high ticket size luxury projects in Greater Noida had been launched, and the end-user demand in the area was dominated by low-end housing. Outcome: low resale and rental.
- As per Knight Frank India (2024), the highest appreciation was seen in mid-segment housing (₹40–80 lakh range), not luxury.
Lesson: Always align investment with the demand profile of the area.
7. High Maintenance and Poor Rental Yields
If maintenance costs are too high compared to rental income, buyers avoid such properties.
- Fact: Average rental yield in India is 2–3%, but in some luxury projects with high maintenance, yields drop below 1.5%, making them unattractive for investors.
- Buyers prefer properties that are easy to rent out, as rentals support appreciation.
Lesson: Sustainable rental demand drives capital growth.
8. Neglect of Future Development Plans
Many investors buy into “future promise” rather than reality. But if infrastructure projects are delayed or cancelled, appreciation suffers.
- Case: Several housing projects along the proposed Yamuna Expressway metro corridor saw stagnant prices when metro expansion was delayed.
- Investors who rely only on “announced projects” often face long waiting periods without appreciation.
Lesson: Invest based on existing infrastructure, not just future promises.
Expert Insight
Real estate experts highlight a common mistake: “Investors follow herd mentality instead of fundamentals.”
According to JLL India (2023), more than 40% of unsold inventory in NCR is in locations where buyers chased hype without checking liveability factors.
All the properties in a booming city do not appreciate. It depends on such factors as micro-location, the balance between demand and supply, infrastructure, the credibility of builders, and legal clarity.
For Indian buyers and investors, the safest strategy is:
When considering investing in the NCR or any other Indian metro, market hype is not the sole way to go. Use a reference consultant, who can examine location basics, developer track record, and demand in the long term.
For expert guidance on property investment, reach out to the top real estate consultancy service in Gurgaon and make informed decisions that secure your returns.
