It started off as an affordable housing destination; was then plagued by litigations pertaining to land acquisition; witnessed price escalation and higher FSI and density norms, and finally saw the emergence of premium housing, R
It started off as an affordable housing destination; was then plagued by litigations pertaining to land acquisition; witnessed price escalation and higher FSI and density norms, and finally saw the emergence of premium housing, as well. The real estate market in Noida Extension (now rechristened Greater Noida West), has weathered many challenges.
While the market may have left some of its controversies behind, following clearances by the Supreme Court of India that ordered extra compensation to the farmers and the authorities, in turn, granting additional FSI (from 2.75 to 3.5) to the builders, the bigger problem has been over its positioning. The authorities have failed to do justice to Noida Extension, by positioning it as yet another micro- market to supplement Noida and Greater Noida.
Noida Extension was created as an altogether different micro market than Noida and Greater Noida, but was never conceptualised as a sub-city, even though the master plan had provisions for everything that a sub-city would need, including office spaces, IT spaces, retail, entertainment hubs, educational institutions and other social infrastructure. Even the official pin code has not been allotted, thus far. New projects in this region, of late, are as much in the premium category, as in the affordable segment.
Increase in Noida Extension property prices
Consequently, with the kind of supply that is in the pipeline, will Greater Noida West be forced to shed its ‘affordable destination’ tag? Vineet Relia, managing director of SARE Homes, feels that flats in Greater Noida West are bound to cost more, owing to several upscale projects that are coming up in some areas and with the hike in stamp duty in UP (from 5% to 7%), effective April 1, 2016. In such cases, the affordable tag will not be applicable to all projects in this region, he maintains.
“Earlier, the positive verdict from the National Green Tribunal on the Okhla Bird Sanctuary issue, was a big boost for developers and flat-owners in the region. However, as properties in this region are on lease, transfer fees and lease rent also come into play, thereby, pushing up the total cost of the unit. Now, with the 2% hike in stamp duty, there will be a further increase in property prices and it will impact sentiment negatively, putting a question mark on the affordable tag,” Relia explains.
A mix of developments
Nikhil Hawelia, managing director of the Hawelia Group, points out that more than 50,000 flats will be delivered in Greater Noida West, in the next three quarters. Complementing Noida, it will remain a destination for the lower and middle-income groups. A majority of the apartments in this region, range from 700 sq ft to 1,500 sq ft, whereas other adjacent sectors of Noida have 1,200 sq ft to 2,500 sq ft flats, he adds.
“Initially, the emphasis was on meeting the basic housing needs. Consequently, all construction and development works were focused on fulfilling the required demand.
“Due to the small size of units and the need to maintain equilibrium, vis-à-vis Noida’s residential market, Greater Noida West will remain an affordable region, for another couple of years,” says Hawelia.
Analysts point out that a mix of high-end residential projects, as well as commercial establishments, will be inevitable, with the entry of MNCs, corporate houses and large-scale industries in the next few years. In another four to five years, this region will have the potential to become a preferred destination for premium projects, they conclude.
(The writer is CEO, Track2Realty)