Home prices could increase in Noida Extension
With development firms and brokers pushing to increase rates over the next few quarters, serious home buyers should consider buying in Noida Extension, at current prices
The real estate market in the Noida Extension area, in the National Capital Region (NCR), warrants close observation. Among the factors that favour buyers in this market, is the oversupply of under-construction and near-completion residential projects, which has forced developers to apply new strategies to keep up sales. Numerous subvention schemes are being offered in the area. Moreover, owing to subdued buyer sentiment, the area is witnessing poor offtake. Consequently, brokers are under pressure to boost sales and meet their targets.
Increase in rates in near future
While this presents a unique opportunity for buyers, it also insinuates a possibility that the rates in the region will increase. Even buyers flocking to this region, have started to realise this situation. “There are clear signs of such a rate push, by all the stakeholders in the market,” states Ankit Sharma, a first-time buyer. “Firstly, development firms who have paid higher farmers’ compensation, are now demanding the same amount from their old buyers. Secondly, there is a sudden rush among some top builders, to finish certain stages of their projects. This will help them gather more momentum on the sales front,” he reasons. Sharma is a company secretary by profession and has booked a two-bedroom apartment in the area. His home will be ready for possession in the next one year.
It is expected that Noida Extension will see the completion of at least 10 to 15 projects by the end of 2017. Apart from projects that are nearing completion, and some which are already complete and have offered possession; most other projects will also see the completion of certain phases of development.
“Serious buyers and first-time home buyers are looking at residential projects that offer possession in a year,” says Vineet Thukral (name changed), a high ranking official from Investors Clinic, an organised brokerage and consultancy firm. Going by the status of projects, developers are confident that they will be able to command a certain price for finished apartments, adds Thukral.
The average price in Noida Extension is Rs 3,300 per sq ft. Projects, where certain phases are complete, have sold for as high as Rs 4,000 per sq ft. Projects nearing completion quote a slightly lesser price, while those under development and far from completion, are available at even lower rates. Consequently, buyers have a lot of room to negotiate.
What lies ahead?
According to property consultancy firm Knight Frank India, developers will try to keep project launches under check in the coming quarters. Brokers and market participants had estimated that the region would witness the launch of not more than 3,000-4,000 units in the first quarter of 2016. “Prices may not reduce further, owing to projects being ready and due to the absence of big-ticket buyers in the market,” explains Devendar Pandey, a broker who operates in the region.
So far, delays in project delivery have made buyers wary of making investments. However, home seekers could consider taking the plunge now, to avoid buying at an inflated rate and to gain from the current market scenario.