REGISTRATIONS DOWN BY 30%
Experts attribute decline to National Green Tribunal order in Noida and oversupply in other NCR areas
Rows upon rows of brand new residential blocks stand on both sides of Noida E x p r e s sw ay a n d D w a rk a E x p r e s sw ay i n t h e N C R region – but most of these remain unoccupied. Today, builders are grappling with a number of problems, including the National Green Tribunal (NGT) orders for areas around the Okhla Bird Sanctuary and lack of infrastructure in some areas, which are keeping potential homebuyers away.
Several projects in Noida remain unsold because of the NGT order forbidding authorities from registering properties falling within the eco-sensitive zone around the Okhla Bird Sanctuary. Homebuyers in Gurgaon are also hesitant to take possession because of inadequate infrastructure facilities in the area.
Transactions are drying up also because of high circle rates in some areas due to which buyers have to pay higher stamp duty for registering property.
Registrations in Noida area have come down by 30% in the last six months largely due to the NGT provisions and hike in the allotment rates in the area, says Vijay Chandel, former deputy inspector general, UP stamps and degistration department, Gautam Budh Nagar.
NGT had barred the Noida Authority from giving completion certificates to projects falling within a 10-kilometre radius of the Okhla Bird Sanctuary over a year ago. Last year, a draft notification issued by the environment ministry said that the sensitive zone around the sanctuary should be limited to 100 metres on three sides. The NGT order impacted several real estate projects, delaying possession. The Noida Authority can now only issue completion certificates to builders after the draft notification is finalised. They can then start handing over apartments. The long delay has meant losses of over 2,000 crore to buyers and builders even as the former have been shelling out EMIs as they await possession.
Talking about revenues going down by 30% in the last six months, Sanjay Srivastava, sub-registrar, Ghaziabad, says investors in the secondary market, too, are holding on to properties and not selling them.
Registrations are directly linked to the sales in an area. Sales in NCR have also reduced drastically because of the prevailing supply- demand mismatch, high prices and buyers waiting for further cuts in interest rates.
Most end-users feel that the ticket size and the cost of the units are not justified and that the developer has not aligned the product to their needs. Some of them feel cheated because the developer sells apartments on the basis of super area and gives them a much smaller carpet area (space within four walls). Many are also of the opinion that property prices are unjustified given the lack of infrastructure in the area, says Ashutosh Limaye, head research and REIS.
Expected cuts in interest rates are also another reason why many people are putting off their homebuying decisions. Investors, too, are keeping away as they feel the appreciation will be fairly modest and the oversupply situation in the market may not be attractive and hence not viable. Poor return on investments is also likely to have put off a few of them.
Another issue of concern for market players is the existing oversupply situation in all NCR micro markets, more so in Noida and Gurgaon. Haryana’s Millennium City, however, can tackle the problem because of its strong office/economic activity base.
Developers there have also been j udicious about not launching too many projects, keeping supply under control. Full-scale project launches have also been far and few, with perhaps only an additional tower being added to ongoing projects, adds Limaye.
The Noida market on the other hand may have no solutions because of huge supply. Office-led demand, too, is not that strong, he says.
The Ghaziabad market remains affordable and not impacted to a large extent because of consistent end-user demand.