Should Noida be your in­vest­ment des­ti­na­tion?

It does have po­ten­tial as in­vestors hold­ing on for some time to their prop­er­ties are likely to be look­ing for exit op­por­tu­ni­ties

HT Estates - - FRONT PAGE - Van­dana Ram­nani

Wi th the Cen­tre de­cid­ing to no­tify a sharply cur t ailed ecosen­si­tive zone around the Okhla Bird Sanc­tu­ary within a week, nearly one lakh home­buy­ers in Noida wait­ing for two long years will fi­nally get pos­ses­sion of their apart­ments in the com­ing months.

Both home­buy­ers and de­vel­op­ers have wel­comed the move to re­strict the sen­si­tive zone around the Okhla Bird sanc­tu­ary (100 me­tre from the sanc­tu­ary bound­ary on three sides, and 1.27km in the north). “The de­ci­sion will en­able al­lot­tees to get pos­ses­sion of the apart­ments and al­low de­vel­op­ers to com­plete projects.” For those wait­ing in the wings ever since the Na­tional Green Tri­bunal (NGT) im­posed a ban on con- struc­tion in the sen­si­tive zone this might be a good in­vest­ment op­por­tu­nity as clar­ity on the NGT is­sue will have many in­vestors want­ing to exit quickly from prop­er­ties they have been hold­ing on for long. Buy­ing apart­ments at 2012 prices in this area is a good op­tion, say real es­tate ex­perts.

Till date, trans­ac­tions in the sec­tors af­fected by the NGT ban in Noida are at a stand­still. Go­ing for­ward, prices are likely to go up marginally (not more than 10%) for projects that are of good qual­ity, have an ex­ist­ing so­cial in­fra­struc­ture and are ready to move in. This would con­sti­tute around 10% of devel­oper projects and around 30,000 units. “The price band of ₹ 4,200 to ₹ 4,500 is a great price con­sid­er­ing the fact that there would be Metro con­nec­tiv­ity in the area in the com­ing years,” says Anckur Sri­vast­tava of GenReal Ad­vis­ers.

A sub­stan­tial part of the stock in this mar­ket, how­ever, is held by in­vestors who may be des­per­ate to sell. Around 30% to 40% prop­erty buy­ers in the area were in­vestors who would not want to take pos­ses­sion or pay stamp duty. These units may be off­loaded at a 5% to 10% dis­count in the sec­ondary mar­ket. Gen­er­ally in­vestors hold a prop­erty for not more than a year but in this case they have stayed in­vested for at least three years. Any exit is welcome. This liq­uid­ity in the mar­ket will im­prove ac­tiv­ity and also keep prices in check for the next few months.

It should also be n o t e d t h at a ma­jor­ity of projects in this mar- ket are not yet com­plete. De­vel­op­ers who were us­ing the NGT as an ex­cuse for the de­lay will now be un­der pres­sure to hand over pos­ses­sion and so the mar­ket is likely to see a num­ber of units de­liv­ered over the com­ing months.

There are three cat­e­gories of de­vel­op­ers who are likely to emerge in the com­ing months. Be­sides those who have com­pleted their projects and are wait­ing for the oc­cu­pa­tion cer­tifi­cates (which the Noida Au­thor­ity has promised to hand over within 40 days), about 60% de­vel­op­ers in the mar­ket are those have been un­able to com­plete projects due to cash flow is­sues. They may bounce back once they get fund­ing and clear their ar­rears with the au­thor­ity. The third cat­e­gory that buy­ers need to be cau­tious about are those who do not have the fi­nan­cial where­withal to com­plete their projects.

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