The demolition of the twin towers is unlikely to have an adverse impact on housing demand and prices in Noida and Greater Noida as the market has already factored in the Supreme Court's decision passed nearly a year ago, according to industry experts.
The experts also opined that the demolition of the illegal structures that happened on Sunday after more than a nine-year long legal battle is also expected to boost consumer sentiments, especially in terms of enforcing the rights of homebuyers.
In recent years, properties developed by builders with credible track record are in demand after a raft of instances of homebuyers facing problems of long delays in getting possession even after making payments. The decision to demolish the twin towers of Supertech, located in the fast-growing Noida and Greater Noida property market in Uttar Pradesh, is one such example.
"The demolition of the twin towers will not impact prices and demand in Noida and Greater Noida. Even though the buildings were demolished recently, the news is old, and the sector has moved on," CREDAI NCR President Manoj Gaur told PTI. The twin towers -- Apex (32 storeys) and Ceyane (29 storeys) -- were demolished in 12 seconds on Sunday, in a carefully choreographed and meticulously executed demolition, the biggest such exercise in the country so far.
Over 3,700 kilogram of explosives were used to reduce the 100-metre tall structures to a huge pile of rubble. Gaur, the CMD of Gaurs Group, noted that the demand drivers and factors affecting the pricing are entirely different at present.
"The market at present is end-user-driven and regulated efficiently by measures like RERA. Therefore, the sector has already addressed the issues that led to the demolition of the twin towers. Today, the market is robust and sufficient mechanisms are in place to ensure the buyer's confidence," he added. Housing brokerage firm Anarock Vice Chairman Santhosh Kumar said the demolition of the twin towers conveys that the authorities and the judiciary have zero tolerance for any malpractices.
"This reinforces the consumers' confidence in the system and empowers them substantially. The buyers today are more discerning and prefer to go with developers and projects with a clean track record," he told PTI. In 2022, Noida and Greater Noida together accounted for nearly 30 per cent of Delhi-NCR's sales, indicating the importance of these markets to the region.
As per Anarock, the current average residential real estate prices for Noida and Greater Noida are Rs 5,120 per square feet and Rs 3,750 per square feet, respectively, while the price appreciation during the past five years has been 8 per cent and 15 per cent, respectively. "While the demolition attracted a lot of attention, the prices are not likely to be affected due to this action. On the contrary, the buyers may now feel safer and more secure towards real estate purchases," Kumar said.
As per the Anarock data, homebuyers who booked flats in housing projects in Noida-Greater Noida are worst affected, with over 1.65 lakh flats worth Rs 1.18 lakh crore stalled or significantly delayed in these two cities at May-end. In its research, Anarock has taken only those housing projects that were launched in 2014 or before, across seven cities -- Delhi-NCR, Mumbai Metropolitan Region (MMR), Kolkata, Chennai, Bengaluru, Hyderabad and Pune.
As many as 4,79,940 units worth Rs 4,48,129 crore were "stalled or heavily delayed" across these seven cities as of May 31, 2020. Out of this, Delhi-NCR alone accounted for a whopping 50 per cent with 2,40,610 stalled or delayed units worth Rs 1,81,410 crore. In Noida and Greater Noida, there are 1,65,348 units worth Rs 1,18,578 crore stalled or delayed units.
The Delhi-NCR property market, one of the biggest in India, has remained impacted because of defaults by developers in completion of real estate projects. Jaypee Infratech, Unitech, Amrapali and The 3C Company are some of the big companies whose projects are stalled in Delhi-NCR.
There are many other builders who have defaulted on their promises to deliver their projects on time to customers, who have already paid almost the entire purchase price and are also paying interest on home loans. Homebuyers have approached various courts as well as the National Company Law Tribunal (NCLT) against many defaulting builders.
Jaypee Infratech Ltd (JIL) went into the Corporate Insolvency Resolution Process (CIRP) in August 2017. Mumbai-based Suraksha group in June last year received the approval of financial creditors and homebuyers to take over JIL, raising hopes of more than 20,000 homebuyers of getting possession of their flats.
Suraksha group is yet to get approval for its resolution plan from the NCLT. In the case of Unitech, the Supreme Court in January 2020 allowed the Centre to take total management control of the company and appoint a new board of nominee directors. Yudvir Singh Malik was appointed as the new CMD after the central government superseded the Unitech board.
This decision was aimed to bring respite to over 12,000 hassled homebuyers of Unitech, but the customers are still waiting for the possession of their apartments. In the case of Amrapali, state-owned NBCC has undertaken the completion of many residential projects in Noida and Greater Noida under the aegis of the Amrapali Stalled Projects and Investment Reconstruction Establishment (ASPIRE) and the supervision of the Supreme Court.Around 40,000 homebuyers who are stuck in various projects of Amrapali group have become hopeful of getting possession of their flats after the intervention of the apex court, which entrusted the NBCC to complete these projects.