The Noida Authority has confirmed a hike of 20-30% in land rates across multiple categories, which will scale up prices throughout the area, directly affecting home buyers. A price hike was anticipated, since the last round took place in October, 2019, although it may lead to an initial slump in housing demand, since overall acquisition costs will escalate for potential buyers. Add the recent hike in interest rates to the equation, and home buyers may face the brunt in Noida.
Experts feel that since the commencement of work on the Jewar International Airport, real estate activity has gone up considerably in surrounding zones, leading to an increase in prices of land. They have already gone up by 30-40% over the last couple of years on account of multiple such developments. The pandemic has also led to high demand for residential plots, which has also led to the rise in prices. Multiple plotted development projects have already launched along the Yamuna Expressway over the last 2-3 years and plot prices have already gone up by close to 38% here as per reports, touching Rs. 2,200 per sq. ft. for H1 2022 as compared to Rs. 1,600 per sq. ft. in H1 2019.
Experts also feel that this is the highest such price rise in land for any micro-market amongst the country’s top cities, mostly due to rising demand and also due to lower availability in several major stretches. The price hike by the Authority will further increase prices of land and affect new launches as well. Many developers have paused new launches, preferring to adopt a wait-and-watch model for the time being as well.
The Co-Founder and CFO, Square Yards, Piyush Bothra, stated that the decision by the Noida Authority to hike land prices by 20-30% at once will affect housing demand over the next few months in Noida, with property prices likely to increase as a result. Developers will initially feel the squeeze while buying land parcels and will have to raise prices of property by 10-15% to account for the higher costs of acquisition. He also stated that Noida is already affected by high unsold inventory amounts and stuck real estate projects, and the latest decision may aggravate things further, leading to more negative sentiments alongside.
Serious buyers in Noida will have to pay more in the future, while first-time buyers may postpone their purchases until a more favorable period. Land prices will go up considerably in a city where affordability of housing has been its major demand driver even throughout the coronavirus pandemic. Hence, many experts feel that Governments should be careful while implementing such measures. The Government has also declined the possibilities of reductions in stamp duty and circle rates, although many other cities took this route for boosting real estate markets after the pandemic. Market sentiments still seem positive, although there could be an impact due to land price hikes, price increases, interest rate hikes, and higher raw material costs, according to industry experts.
For a detailed report on this read the articles we were featured in:
The Financial Express – https://bit.ly/3QInqrq
The Economic Times – https://bit.ly/3JVfHnC
Published Date: August 12, 2022
