Bottom Line: Affordability is the only magnet to attract invest in Noida Extension and the location is yet not infrastructure ready to attract homebuyers otherwise.
â€śI am living closer to capital Delhi but this vicinity at Noida Extension is no less than a capital punishment. Everyday while going to office in the morning and coming back in the evening I have to get into traffic bottleneck at Kisaan Chowk (entry point roundabout). I feel the temptation to buy a house in one of the most affordable housing markets has landed me in a real lifelong soup,â€ť says Sonali Pradhan, a bank employee.
Her grouse is not without the merit. Even today after nearly a decade of Noida Extension being carved out and planned by the government agency, the civic apathy has been quite challenging. One has to weather a number of challenges from bad condition of roads to traffic bottlenecks and overall infrastructure deficit. It seems the USP of most affordable market has already taken a hit.
This also raises a fundamental question as to whether affordability is the only USP of Noida Extension? Is the market lacking behind on all other indicators of livability index, including physical and social infrastructure. For how long the tag of affordable market drive the huge inventory in this locality?
Rajeev Dayal, a local property agent admits that Noida Extesnion has not grown beyond the tag of affordable housing market. According to him, all the prospective homebuyers come to him precisely for the reasons of cheaper homes, compared to any other parts of Noida, Greater Noida or Ghaziabad.
â€śOut of around 3 lakh apartments that are planned in this market, not even one third has been delivered. And you have traffic nightmares all through the day. Just imagine the scenario when around 3-4 lakh cars would be on roads. I think the Greater Noida Authority is killing the golden goose by not implementing the planned infrastructure developments in this micro market,â€ť says Dayal.
Developers who have projects in Noida Extension nevertheless have reasons to be offended with the locality being dubbed as just cheap home destination. Nikhil Hawelia, Managing Director of Hawelia Group questions whether the critics have done the price index evaluation in the right sense. According to him, the market has just started shaping up and it can not be dismissed as just another affordable housing destination.
â€śAround 6-7 years back when the first set of projects were launched the price point was around INR 1800 per sq feet. Today, the average price point is INR 3600 per sq feet with quality projects at INR 4000 over sq feet and above. It is an appreciation of more than 100 per cent when the market is just getting habitation ready. More importantly, the property market during this period has been subdued across the country. The pricing in the next few years would definitely be competitive with the rest of Noida,â€ť says Hawelia.
However, beyond the optimism of the developers in the market, the fact remains that even when only one third of the planned inventory is ready in Noida Extension there are infrastructure issues. This is one of the reasons why a large share of these ready apartments is vacant, even if these have been sold out.
The buyers who bought an apartment in Noida Extension do not wish to shift to this locality, as the livability index is less than desirable. The ground realities clearly suggest that Noida Extension has not outgrown the affordability magnet.
Facts speak for themselves:
The price point of Noida Extension could not breach INR 4000 per sq feet
Most of the projects are around INR 3000-3200 per sq feet
There has been no price appreciation in the last over a year
JLL in a report had earlier declared Noida Extension as high-risk zone and advised the homebuyers to stay away
JLL report had said that with around 2 lakh apartments coming up the market is not likely to appreciate
Local transport facilities from authorities and state government are still not functional
Noida Extension has higher FSI & density norms than Noida
Physical infrastructure projects are pending and social life is missing
There is no clarity of underpass to ease out traffic bottlenecks
There is no clarity of proposed metro in Noida Extension
Most of the office spaces, IT buildings and SEZs are way behind schedule
The moot point in Noida Extension today is whether the locality would be able to cope up with the influx of 3 lakh plus families. Most of the urban planning experts in this part of the world maintain that unless the Greater Noida Authority gets into a fast forward mode to execute the planned infrastructure projects living in Noida Extension would be challenging in the days to come.
The property that is being sold today is mainly because of affordability factor. This is also inviting the investors who are mostly retail investors since organized segment of investors is not ready to bet on this market yet.
A ghost town is hence in the making in Noida Extension. The attraction of affordable destination that should have ideally been icing on the cake has actually dented this market. Noida Extension is today evolving as a case study in how only the affordability could not be the investment magnet for any location.
By: Ravi Sinha