Bottom Line: Noida sector 70-79 is ahead of the affordability curve with prices above INR 1 crore and above not an exception.
Backed by the media reports that suggested Noida is by far the most affordable location in and around Delhi-NCR, Ramesh Vats was on a house hunt in the market. His perception about the Noida market was by and large true till the local agent took him to the stretch of Sector 70 to 79.
Vats was surprised as many of the properties in this market were in the price range of above INR 1 crore. Moreover, there were less affordable properties, compared to premium and high-end projects.
â€śIt looked like New Gurgaon kind of a market in terms of the price point. But where the Noida Sectors from 70 to 79 are different from Gurgaon or New Gurgaon is the rate of transactions which is way higher in this part. Even the secondary market transactions are quite healthy over here. More importantly, the prices in this stretch have been firm even in the wake of overall slowdown in economy and some correction in other neighbouring markets,â€ť says Vats.
The fact of the matter is that any prospective buyer in Noida who does not have budget constraints would be tempted to buy an apartment along this stretch. Most of the projects that have come up in the last six to seven years are premium category projects with ultra modern amenities and facilities. Among the newly developed locations, the habitation has hence been faster in this region.
This raises a fundamental question as to what is driving the markets of these sectors. Why are most of the new launches in the premium category? Is there any method in this madness or the sectors are going to add on to the inventory only?
Developers, on their part, justify the high-priced properties in the stretch due to higher land prices. Analysts feel due to its strategic location-advantage and the resultant faster absorption of premium homes, the developers have been encouraged to launch more and more upscale projects. They nevertheless agree to the fact that the stretch will have higher demand of infrastructure once all the projects are delivered.
Nikhil Hawelia, Managing Director of Hawelia Group has a caveat here when he says that currently the real estate sector is witnessing slowdown but major demand in affordable category is still alive. Land component for sector 70 to 79 of Noida is highly priced which in turn makes these sectors costlier/premium to the end user. Flats in this region are ranging from INR 60 lakh to 1.50 crore, which is hardly a part of the current demand.
â€śSupply surplus in these sectors will be consumed when the confidence of upper middle class buyers in the economy will get a boost. As far as infrastructure is concerned, Noida Authority has taken many initiatives and already put in place the infrastructure for power, water, roads, sewerage, etc in the said region. But still when this supply surplus will meet the demand, solution for certain infrastructure bottlenecks would be immediately required,â€ť says Hawelia.
Vineet Relia, Managing Director of SARE Homes feels Noida Sectors 70-79 are not the only markets to witness supply surplus. According to him, as multiple projects were launched in earlier years, and off-take of flats was slow due to the nationwide real estate slowdown, a surplus supply of housing units was but natural. â€śWith connectivity and infrastructure issues also in the picture, it may take some time before these issues are addressed to the satisfaction of buyers.â€ť
These challenges apart, the buyers in the premium segment of housing are betting big on the stretch. The investors also endorse these sectors for long-term growth and appreciation. And hence, most of the new launches in the premium category over here are in the price range of above INR 6000 per square feet, which is quite attractive form the standpoint of average property prices in Noida.
Even though the area is yet to be fully habitable and most of the projects are under construction, its rental value of average INR 12 per square feet is among the best in Delhi-NCR and not just Noida.