DTZ survey finds NOIDA Extension back on growth track

A DTZ survey has found unrest in Noida Extension has had a mild impact on total number of housing units planned. The survey says that the total number of housing units that were planned before the unrest in Noida Extension has remained more or less the same with a minor downward revision.

Before the unrest, 62,017 units were being planned and developed in key projects. Now, that number stands at 61,585 in those very projects under consideration. The National Capital Region Planning Board (NCRPB) approved the Master Plan on August 24, 2011. The much awaited approval has brought in major relief to the homebuyers as well as the developer community active in Noida Extension.

Anshul Jain, CEO, DTZ India says, “There is no doubt that there will be an upward pressure on pricing due to the increase in the compensation to the farmers and rising input cost. However, the region will still be much more affordable than Noida, Gurgaon and Greater Noida. With approvals in place, the demand will certainly increase due to the lower cost of houses providing opportunity for both the investors and end users.”

The USP of Noida Extension has been the ‘affordable housing’ theme. The region witnessed heightened activity between 2009 and 2010 due to the launch of residential projects with average per square feet rate of INR 2000 to 2200. At this cost, the dream of owning a home seemed a reality for most of the potential home buyers and a lucrative investment opportunity for the investors. With the NCRPB’s approval to the Master Plan, this dream seems to be close to becoming a reality. At last the home buyers and the developers can heave a sigh of relief.

At the same time, the entire issue of land acquisition and lack of required approvals such as Master Plans, should serve as an important lesson for the Government and the respective authorities to follow appropriate governance to avoid such issues in future.

The draft Land Acquisition and Rehabilitation and Resettlement Bill 2011 (LARR 2011) is yet to see the light of the day. Such issues adversely affect the growth and development of the country and should be prevented in the first place by having appropriate regulations in place and ensuring their absolute compliance.

The controversy surrounding Noida Extension had left investors wary of making investments in the region and developers were facing huge losses due to the halt in the construction of their projects. Due to the land acquisition issue, the Allahabad High Court, in some cases quashed the land acquisition and in other cases, the developers were asked to pay higher compensation to the farmers.

The Noida Extension comprises following villages:

1.       Patwari

2.       Shahberi

3.       Roja Yakubpur

4.       Bisrakh

5.       Khera Chauganpur

6.       Khairpur Gujjar

7.       Tushyana

8.       Amnabad

9.       Saini

10.   Haibatpur

11.   Etehda

12.   Chipyana Khurd

13.   Yusufpur

Not all villages mentioned above were affected by the land acquisition imbroglio last year. The construction work had been stopped in the entire Noida Extension area after the land acquisition controversy and Allahabad High Court’s order in October 2011 to get the Greater Noida Master Plan 2021 approved before commencing any further construction.

Following is a quick look on what does the approval means for various stakeholders:

Developers: It is definitely good news for them as their projects had been on hold for almost sixteen months leading to losses due to blocking of capital, increasing construction cost and no new bookings. The developers will now have to expedite the process to get their project plans approved as per the new master plan to ensure all documents are in place for the existing as well as new buyers to evaluate the project credibility. This is absolutely essential because the potential buyers have now become more cautious and would want to do proper due diligence to ensure the project is free from all encumbrances before they invest.

Existing buyers: Similar to the developers, it is a major load off the shoulders of the existing buyers as they were uncertain about the fate of the projects where they had invested their money (in some cases their complete savings). The existing buyers were going through sleepless nights as their capital was blocked and they had no clue of what would happen next and if at all their investments were safe.

New buyers: It is a mixed bag for new buyers. Owing to the uncertainties looming over Noida Extension, they had been sitting on the fence so far. However, now they can resume their hunt for their dream house or a lucrative investment opportunity. But now they would have to pay extra for the same house which would have cost them less had they gone for it last year.

Exchequer: Once the projects start getting delivered, the houses will have to be registered resulting in the collection of stamp duty.