Although rental values may seem to be undervalued in the Indian context, due to the high capital values of real estate, the fact is that when compared to affordability and median income of cities, rental values remain exorbitant. This is especially true, in the top 10 cities, which are the primary job magnets.
In the Delhi-National Capital Region (NCR), rental values have skyrocketed in Delhi and Gurgaon, in recent times. However, Greater Noida happens to be a market, where the rental values remain comparatively reasonable and suits the budget of the working class. Here, rentals range from Rs 10 per sq ft to Rs 5 per sq ft, with an average value of Rs 7 per sq ft across the sectors of Greater Noida.
The role of educational institutes
Moreover, students are also attracted to this region, due to the mushrooming of educational institutes along the Noida-Greater Noida Expressway. Connectivity to Noida and other parts of Delhi-NCR, has also improved due to the Expressway. Consequently, Greater Noida is evolving from an owner-driven market, to an attractive rental market.
“When educational institutions started coming up in the region, I knew that Greater Noida would evolve into an attractive rental market,” maintains Masood Beig, a local broker. “In the last two years, a majority of the demand has come from students. However, of late, owing to the Noida-Greater Noida Expressway, even the working class individuals are coming to stay here and travel to other parts of Noida and NCR,” says Beig.
How long will it remain affordable?
Ravi Saund, COO of JMS Buildtech, feels that due to this connectivity and resultant growth of rental housing, the realty market in Greater Noida is gradually moving, from affordable to upscale. Recently, developers have launched several luxury projects in this region. What began with a handful of builders competing to build affordable housing, has now turned into a full-fledged race for the luxury space, he explains.
“Now that Greater Noida is free from legal hassles, developers with land in this zone, are flocking the place again. This time, they are trying their luck by creating luxury projects. The reason, could be a risk-reduction strategy of diversification and geographical expansion,” says Saund.
Critics however argue that Greater Noida has not reached its full potential. They point out that infrastructure alone cannot push the real estate market and what is urgently needed, is the availability of public transport. They, nevertheless, agree that rental flats in Greater Noida are still affordable, as one can get a 2-BHK in a decent project, for around Rs 10,000.
Corporates too, are realising the advantages of setting up their businesses in Greater Noida, for its affordable cost of doing business per sq ft. This also serves to attract more workforce to the region, thereby, pushing up the rental potential of the market.
As capital values in Greater Noida have not appreciated much in the last five years, it will continue to remain an attractive market for affordable rental housing, for the next few years. Once the public transport system is upgraded and more upscale properties come up, the dynamics of rental housing may change drastically, in this region.
- With an average rental value of Rs 7 per sq ft, Greater Noida is one of the most affordable rental markets of Delhi-NCR.
- Students and workforce comprise the major demand drivers of rental housing in the sub-city.
- If public transport is upgraded, the rental potential of Greater Noida will be huge.
(The writer is CEO, Track2Realty)