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Unsold real estate inventory in the country, is often blamed on over-supply. The root cause of what is termed as over-supply, may, in fact, be the mismatch between demand and supply. However, this fails to explain the scenario in markets like Rajarhat New Town in Kolkata or Greater Noida West (also known as Noida Extension), which have piled-up inventory in the affordable housing segment. The answer to this dichotomy, is infrastructure, or rather, the lack of it. In most of the affordable housing markets like Greater Noida West, it is the lack of physical, social or economic infrastructure that has resulted in a property overhang.
Noida Extension metro: Phase-2 route and how it will benefit property buyers
Hence, the news of the extension of the metro rail to Noida Extension, has come as a shot in the arm for the property market. The Greater Noida Industrial Development Authority (GNIDA) has approved the extension of Phase-2 metro connectivity from Noida Sector 71 to Knowledge Park 5 in Greater Noida. The alignment will consist of a total of nine stations, with a projected cost of Rs 2,602 crores. The first phase of the project will have five stations – starting from Noida Sector 71 and going on to Sector 122, Sector 123, Sector 4 to Greater Noida West at Ecotech 12 and will culminate in Greater Noida Sector 2. The project is expected to commence in 2019.
This comes as good news to property buyers in Noida Extension like Shubhek Kumar, an IT professional, who bought an apartment in this market. Presently, Kumar is paying the EMI for the house but lives on rent in east Delhi, as the place is not well-connected and also has traffic bottlenecks during peak hours. The extension of the metro trail, according to him, will make this affordable property market habitable. “I used to think of ways to exit the market but there were no buyers in the secondary market. How can I live in a place that is not well-connected by public transport? The lack of public transport also results in more private cars that add to the traffic jam during office hours. Now, I think, the metro will address the concerns, vis-à-vis traffic, as well as price appreciation,” says Kumar.
Impact of Noida Extension metro on affordable housing and property prices
Most of the developers and property analysts in Noida Extension share Kumar’s view that better connectivity would lead to faster property absorption and hence, appreciation in property prices in Noida Extension appreciation, in what is the ‘affordable market’ of the region. Nikhil Hawelia, managing director of the Hawelia Group, which has a couple of projects in the market, maintains that prices will rise by at least 10-20 per cent in the short term and 25-35 per cent in the medium to long term, if other pending infrastructure projects are also cleared.
“We (developers) have relied on the infrastructure plans of the government but the buyers feel that builders have misled them. As a matter of fact, we are the ones who have been misled thus far, by launching affordable housing projects and weathering all the infrastructure challenges. Thankfully, the metro rail will goad the market to its due potential,” says Hawelia.
The property market in Greater Noida West has everything that a buyer of affordable housing looks for – quality construction in the given segment, amenities and attractive price points. This is probably the only market, where affordable housing is on offer in all packages and one can find apartments at price points of below Rs 3,000 per sq ft, while affordable luxury units are on offer at around Rs 4,000 per sq ft. The lack of infrastructure has been the major hurdle that has prevented this property market from achieving its potential of becoming one of the best affordable housing markets in the country. The metro rail, hence, marks the beginning of an infrastructure push for Greater Noida West and a possible price appreciation.
Metro push for Greater Noida West
- The much awaited metro rail has been cleared for Greater Noida West.
- Greater Noida West could be an ideal location for affordable housing in India, if infrastructure and connectivity issues are addressed.
- Analysts forecast a 10-20 per cent appreciation in property prices in the short term and 25-35 per cent appreciation in the medium to long term.
(The writer is CEO, Track2Realty)