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CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

Last updated: June 29 2011
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  • CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

    It is the best time to invest in Noida-Greater Noida, as the new land acquisition policy of the UP government promises to be an investor’s dream. A K TIWARY writes



    If you plan to buy property in the twin cities of Noida-Greater Noida, do not delay. It is the best time to invest as the new land-acquisition policy announced by the UP government recently, promises an investor’s dream in real life. The property rates of twin cities could again skyrocket, thanks to the hefty compensation package announced for farmers.

    Under the new policy, undoubtedly, authorities will have to face an extra burden, as developing authorities will be forced to hike the existing rates. It is believed that the district administration is also planning to revise the circle rates (projected at 25-30% hike in existing rates). Such a projected property hike will make both Gurgaon and Faridabad comparatively cheaper to live in. However, in terms of infrastructure like roads, sewers, water and connectivity, Noida-Greater Noida will always be the best. In the new acquisition policy, developers can acquire land directly from farmers and acquisitions can only happen with the mutual consent of 70% of the farmers in a given area. In case of disagreement, the project would be reviewed. In the affected villages where land has been acquired, the developer would have to construct a Kisan Bhavan as well as a model school.


    Rakesh Yadav, managing director of Antriksh Group says: “The new policy has been framed to safeguard the interest of farmers. The new policy is a historic step and effort would be made to get it implemented at the national level as the Union government has also planned to bring a land-acquisition bill very soon. The land-acquisition policy of UP is even better than the ones being implemented in Congressruled states like Haryana, as it covers both farmers and developers interest.”


    Anil Sharma, CMD of Amrapali Group says: “The whole idea of a majority of villagers endorsing acquisition may act as a non-starter for acquisition due to differing political and social agendas. Even in cases where the government may actually need land to develop some public utility structure or industrial estate, this law may impede their progress. Instead, farmers should be given more generous compensation and should they choose to forgo their right to ask for higher compensation in court, they should immediately be given plots in developed sectors allowing them to profit from the development around them.”


    Naveen Raheja, managing director of the Raheja Group, says: “The land-acquisition policy that sprang up in UP after the agitation by farmers has shown some hope but the fact remains that for big developers, UP only means Ghaziabad, Noida and Greater Noida. Apart from this, UP has to improve its image linked to poor law and order situation. This stigma gives it a negative perception in comparison to other states. Not only the land policy, there are so many other problems that UP has to resolve.”


    Rahul Gaur, CMD of Brys Group, says: “Planned implementation and fast progress is synonymous with UP. It is believed in the real estate circuit that under the prevailing circumstances, implementation of all the mega plans for UP would see light of day in the next few years. It is clear that those areas where land has already been acquired and compensation distributed to farmers will be out of the ambit of the new land acquisition policy.”


    Harmit Chawla, managing director of H Corp Realty Pvt Ltd, says: “The MNCs/TNCs have not shifted their base anywhere in UP as can be seen in the case of Gurgaon. ITeS/BPOs have also coldshouldered UP when compared to other developing cities. The circle rates are more generous in Gurgaon leading to a better realization for the farmer. A farmer can actually buy more tracts of land using that money if he chooses. Also, the opportunity to ask for a higher compensation from a court remains with him even after accepting a compensation cheque. In UP, the circle rates should be brought more in line with the actual transaction values to get it reflected in compensation cheques.”


    “It is good that this policy has sought time-linked completion of projects. This is the most important thing for real estate development anywhere. All plans under implementation ought to be timelinked or time-bound with penalty-linked deadlines. A few things that need urgent attention are law and order to meet security needs, removal of bureaucratic delays, dismantling of development authorities which regulate the industry and delay progress, public-private partnership, single-window clearances for the real estate and construction industry, power, water and sewerage to be developed to meet the future demands,” Manoj Gaur, of JP Group, says.


    Prashant Tiwari, MD of Prateek Group, says: “UP has been definitely trying to compete in the last couple of years by bringing in development schemes through integrated townships and high-tech cities.


    “But UP’s urban development policies should be more favourable to the developers. They should be more stable and well defined. Cities like Moradabad, Lucknow, Meerut, Kanpur, Varanasi, Allahabad, etc, have good potential for real estate development.”


    Land acquisition policy of Uttar Pradesh


    Builders and developers can talk to the farmers directly. Those farmers who do not wish to claim the compensation in cash will have an option where 16% (plus 7% for Pustaini) of the total area of the acquired land will be returned free of cost after development. Such land shall be transferable. Fifty per cent of the developed land given to the land owner shall be for residential use and 50% for nonresidential use (like industrial, institutional, commercial or mixed use).


    The body/undertaking or authority concerned shall itself determine the relative percentage of non-residential use.


    The landowner shall have the option of retaining a part of the 16% developed land given to him and obtain cash compensation for the remaining land on the basis of mutual agreement. The rates of cash compensation shall be declared by the acquiring body at the beginning of the project. The land given to the landowner shall be free from development fee or land-use change fee due to the development authority. In addition to the above package determined by the mutual consent, the following benefits shall also be available to landowners.


    As annuity


    Every landowner, whose land has been acquired, shall be given annuity at Rs 23,000 per acre per year in addition to the compensation amount. The amount of annuity shall be increased by Rs 800 per acre every year. The landowner, who does not wish to avail this annuity, shall be given Rs 2,76,000 per acre in lump sum as rehabilitation subsidy.


    Land acquisition policy of Haryana


    Builders and Developers can purchase land directly from farmers. For this, builders/developers have to obtain an NOC from HUDA (Haryana Urban Development Authority).


    Like in UP, the state government will not interfere in the deals being negotiated with the owners of the land. The landowners will be paid annuity for 33 years apart from the usual land compensation. The amount of annuity will be Rs 18,000 per acre per annum.


    Annuity of Rs 15,000 will be increased by a fixed sum of Rs 500 per year. In respect of land acquired as per policy for setting up of SEZs/ Tech Cities/ Tech Parks, in addition to rehabilitation and resettlement package, a sum of Rs 30,000 per acre per annum will be paid for a period of 33 years by private developers and this annuity will be increased by Rs 1,000 every year.


    QUICK BITES


    IN THE NEW ACQUISITION POLICY, DEVELOPERS CAN ACQUIRE LAND DIRECTLY FROM FARMERS AND ACQUISITIONS CAN ONLY HAPPEN WITH THE MUTUAL CONSENT OF 70% OF THE FARMERS IN A GIVEN AREA

    -TOI
  • #2

    #2

    Re : CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

    Impact is already shown.. authority has increased allotment rate (residential ) by 24% in within 2 years...2009 allotment rate (land) by G.Noida authority was 10500/sqm and from 23rd June.. rate is 13000/sqm…3.5 year back..land rate was Rs.5900/sqm so compare to current rate Rs. 13000/sqm … it is 120% increased…


    Noida /Yamuna expressway authority allotment rate is also got hike by 12.5% again after 10% hike in previous year..

    Builder plot will now be available on bidding and minimum price is also increased by 15%...and in bidding process.. it may also get more costly.

    Comment

    • #3

      #3

      Re : CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

      Originally posted by Mogammo


      If this is the best time to buy in Noida / GN region then what will be the worst time to buy in this region. Can anyone believe in such paid articles by Amrapali Group , Raheja Group , Prateek Group , Brys Group ........... MDs.

      It shows how MDs of each & every project of Noida / GN region are desperate, it looks they are not in a positions to draw their salaries.

      Let me know only few societies in Noida / GN region which actually gives more than bank FD rate of interest in last 3 years after 2008, ie 30% rise in property rate in actual resale transactions after 2008.
      Logically thinking if builders are getting at the higher rate, automatically the price of property would be high?

      Comment

      • #4

        #4

        Re : CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

        Originally posted by Gagan Singh View Post
        Logically thinking if builders are getting at the higher rate, automatically the price of property would be high?


        If some one will invest in a good under construction project [good location and good track record] will certainly get better return [more than ROI].
        NO RISK NO GAIN

        Comment

        • #5

          #5

          Re : CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

          BMW has already given away land to builders at throw-away prices and at very favorable payment terms. Now with new land acquisition policy, land will be significantly costlier. So builders who already have huge land banks stand to gain the most because there will be no new competitor selling flats cheaper than they can. So from now onwards builders will gradually raise prices of their flats thereby earning even higher profits.

          New acquisition policy of UP is meant to help builders more than the farmers.

          Only speed-breaker that can come in the way of this politician-builder mafia is the court orders that are like to come in next few weeks or months.
          Last edited June 25 2011, 10:43 PM.

          Comment

          • #6

            #6

            Re : CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

            Originally posted by ThePunjabi View Post
            BMW has already given away land to builders at throw-away prices and at very favorable payment terms. Now with new land acquisition policy, land will be significantly costlier. So builders who already have huge land banks stand to gain the most because there will be no new competitor selling flats cheaper than they can. So from now onwards builders will gradually raise prices of their flats thereby earning even higher profits.

            New acquisition policy of UP is meant to help builders more than the farmers.

            Only speed-breaker that can come in the way of this politician-builder mafia is the court orders that are like to come in next few weeks or months.
            Completely agree with this view.

            BMW has eaten the goose that lays golden eggs and is making sure no-one else can ever look for golden eggs ever again.

            Buying ready to move NOIDA flats in a year or two would be a good move
            Venky (Please read watch a or before posting)

            Comment

            • #7

              #7

              Re : CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

              Flats prices...

              Originally posted by Venkytalks View Post
              Completely agree with this view.

              BMW has eaten the goose that lays golden eggs and is making sure no-one else can ever look for golden eggs ever again.

              Buying ready to move NOIDA flats in a year or two would be a good move
              Whatever everyone says... but I think as builder will have to shell out more money for farmers... so prices will be high here also like in Gurgaon...

              RE works with a margin and to keep that margin, builders will have to increase prices in future.. if BMW doesnt come in power next time, then prices will surely go out of roof... as new govt will please the farmers with more compensation...

              Comment

              • #8

                #8

                Re : CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

                Originally posted by ThePunjabi View Post
                BMW has already given away land to builders at throw-away prices and at very favorable payment terms. Now with new land acquisition policy, land will be significantly costlier. So builders who already have huge land banks stand to gain the most because there will be no new competitor selling flats cheaper than they can. So from now onwards builders will gradually raise prices of their flats thereby earning even higher profits.

                New acquisition policy of UP is meant to help builders more than the farmers.

                Only speed-breaker that can come in the way of this politician-builder mafia is the court orders that are like to come in next few weeks or months.
                For all current priojects builders are paying 10% upfront to NA and remaining in installments spread over years. If you check the plot auctions recently done by NA, builders launched their projects within 6months of winning a bid.

                If under the new land acquisition policy land has to be directly brought from farmers, then it involves 100% upfront payment as is being done in Ggn. This is a huge cost and builders have to jack up prices to sustain.

                With so much upfront payment required, new launches will dry up as every tom, dick & harry will not be able to arrange the upfront investments required. Builders will not be able to launch & build projects with allotees money only as is happening now. So small time builders will disappear. And with less new projects coming up, prices will get pushed up.

                Comment

                • #9

                  #9

                  Re : CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

                  UP's New Land Acquisition Policy To Make Homes Dearer By 10% In Noida


                  Uttar Pradesh's new land acquisition policy will make homes dearer by 10 per cent in towns like Noida Extension or Greater Noida as it will push up the land costs for town development authorities and developers buying land from them.

                  "According to the new policy, the authority will have to return 16 per cent of developed land or cash in lieu of it to farmers, plus resettlement and rehabilitation benefits. The cost of this will get loaded on the remaining land," said Supertech Chairman R K Arora.

                  He expects land costs to go up by 10 per cent for the authority, which will pass it on to the developers, who in turn would want to pass it onto consumers. Given the demand-supply scenario, excess supply in Noida Extension is estimated to be around 25 per cent or more, developers will find it difficult to pass on the increase in land costs.

                  A good indicator of the excess supply is that in many areas (Crossings Republic on NH-24, for instance), finished units are available at almost the same price (Rs 2,000 a sq ft) as the price at which these units were sold two years back (Rs 1,800-2,000 a sq ft). Luckily for developers, they have sold only 15-20 per cent of the stock that they plan to build in Noida Extension, and hence, the losses will be restricted. Developers launch their project in phases, hoping to sell units at a higher price at a later stage.

                  UP's new land acquisition policy could also be the basis for settlement with farmers in several villages of Noida Extension, where the Allahabad High Court cancelled the land acquisitions. After a settlement with farmers, the Greater Noida Authority is likely to file a special leave petition in the Supreme Court to stay the High Court judgement. The High Court had cancelled land acquisition in five villages in Greater Noida, as land was acquired in many villages without a public hearing of villagers.

                  Wherever there's a town-planning authority, it will acquire land according to the master plan, and farmers will get back 16 per cent of the developed land. Outside authority areas, developers will buy land directly from farmers. ``Since we will buy at market rates, we won't have to give 16 per cent of developed land,'' said Arora.

                  Based on the demand, developers have started buying land outside the authority area. Supretech, for instance, has bought land in Meerut outside the authority area. A few developers say that the new policy won't make a big difference and only formalises an existing method. In Noida, for instance, land was being acquired in two ways.

                  In one process, the Noida authority acquires entire land, and auctions the land to developers, who pays the price and develops the project. In the second process, the developer does the acquisition, acquires 60-70 per cent of land, and the government helps it acquire the balance under Section 4 of the Land Acquisition Act.

                  Under this clause, the government can acquire land by invoking an emergency clause for infrastructure or a regular clause. "The land owners can lodge a complaint within a year and people are heard through a public hearing," said a developer. "Technically, there's no change. Earlier also, developers acquired 60-70 per cent of land; and the government facilitated the rest," said Shravan Goel, Additionalj vice president, Omaxe Ltd.

                  Omaxe has projects in towns like Allahabad, Lucknow and Meerut, where 75 per cent of the land was acquired by the company from the open market based on market rates. "In places like Noida, the price of raw land is so high, 16 per cent norm (the authority is required to return to farmers) won't make a difference," said Goel.

                  The Land Equation
                  A big criticism against the land acquisition process by state or its authorities, especially in Noida or Greater Noida, is that they acquired the land cheap from farmers and sold them to developers, who are now making a killing on the same. In this criticism, what is often forgotten is the kind of land that is being sold at each stage, and when.

                  Assume the authorities bought land at Rs 700 per metre and sold the same to builders at Rs 5,000 per metre, who in turn sell it for Rs 11,000 per metre. "Authorities buy farmland, and what they sell to builders is bulk land, and what the developer sells is developed net land," Pankaj Bajaj, MD, Eldeco Housing, a Noida-based builder.
                  When the authorities buy and develop land, 50 per cent of the land is lost in building roads, parks, and community areas. At the authority level, the wastage could be more than 50 per cent. So, if an authority buys 1,000 acres, it sells only 400-500 acres, but it is a value-added land. Similarly, if a builder is doing row housing, 50 per cent of land is wasted in building roads, schools, sub-stations and other common areas or greens.
                  "The total area that is saleable is only 20 per cent. If one loads this on the basic cost of Rs 700 per sq metre, the cost itself becomes five times to Rs 3,500 per sq metre. This is the cost of raw land. If one adds the cost of developing by the authorities as well as by the developer (Rs 1,000 each), it adds up to Rs 5,500 per sq metre. Add to this, interest costs. From farmland to selling built-up units, it can take seven-eight years," said Bajaj.

                  "In Noida and Greater Noida, most farmers willingly participated in the land acquisition process. The ones who sold unwillingly went to Court. There's a genuine problem on both the sides. Both are being greedy and both are wrong. In some cases, the farmers have taken the money, enjoyed and are now seeking more money," said a developer. Developers say that if they have to return 16 per cent of developed land to farmers, it will make land values expensive, especially in Tier-II towns like Moradabad or Bareilly. "Organised housing development will take a backseat. It has to be viable. You cannot overcorrect the situation," said Bajaj. The policy will have to balance the interests.

                  -Business-standard

                  Comment

                  • #10

                    #10

                    Re : CASH IN ON NEW POLICY - Best time to invest in Noida/GNoida

                    The Newpapers always say that this is the best time to invest. Is there any time which is not the best time?? All seem to be paid news.
                    ________________
                    Originally posted by fritolay_ps View Post
                    It is the best time to invest in Noida-Greater Noida, as the new land acquisition policy of the UP government promises to be an investor’s dream. A K TIWARY writes



                    If you plan to buy property in the twin cities of Noida-Greater Noida, do not delay. It is the best time to invest as the new land-acquisition policy announced by the UP government recently, promises an investor’s dream in real life. The property rates of twin cities could again skyrocket, thanks to the hefty compensation package announced for farmers.

                    Under the new policy, undoubtedly, authorities will have to face an extra burden, as developing authorities will be forced to hike the existing rates. It is believed that the district administration is also planning to revise the circle rates (projected at 25-30% hike in existing rates). Such a projected property hike will make both Gurgaon and Faridabad comparatively cheaper to live in. However, in terms of infrastructure like roads, sewers, water and connectivity, Noida-Greater Noida will always be the best. In the new acquisition policy, developers can acquire land directly from farmers and acquisitions can only happen with the mutual consent of 70% of the farmers in a given area. In case of disagreement, the project would be reviewed. In the affected villages where land has been acquired, the developer would have to construct a Kisan Bhavan as well as a model school.


                    Rakesh Yadav, managing director of Antriksh Group says: “The new policy has been framed to safeguard the interest of farmers. The new policy is a historic step and effort would be made to get it implemented at the national level as the Union government has also planned to bring a land-acquisition bill very soon. The land-acquisition policy of UP is even better than the ones being implemented in Congressruled states like Haryana, as it covers both farmers and developers interest.”


                    Anil Sharma, CMD of Amrapali Group says: “The whole idea of a majority of villagers endorsing acquisition may act as a non-starter for acquisition due to differing political and social agendas. Even in cases where the government may actually need land to develop some public utility structure or industrial estate, this law may impede their progress. Instead, farmers should be given more generous compensation and should they choose to forgo their right to ask for higher compensation in court, they should immediately be given plots in developed sectors allowing them to profit from the development around them.”


                    Naveen Raheja, managing director of the Raheja Group, says: “The land-acquisition policy that sprang up in UP after the agitation by farmers has shown some hope but the fact remains that for big developers, UP only means Ghaziabad, Noida and Greater Noida. Apart from this, UP has to improve its image linked to poor law and order situation. This stigma gives it a negative perception in comparison to other states. Not only the land policy, there are so many other problems that UP has to resolve.”


                    Rahul Gaur, CMD of Brys Group, says: “Planned implementation and fast progress is synonymous with UP. It is believed in the real estate circuit that under the prevailing circumstances, implementation of all the mega plans for UP would see light of day in the next few years. It is clear that those areas where land has already been acquired and compensation distributed to farmers will be out of the ambit of the new land acquisition policy.”


                    Harmit Chawla, managing director of H Corp Realty Pvt Ltd, says: “The MNCs/TNCs have not shifted their base anywhere in UP as can be seen in the case of Gurgaon. ITeS/BPOs have also coldshouldered UP when compared to other developing cities. The circle rates are more generous in Gurgaon leading to a better realization for the farmer. A farmer can actually buy more tracts of land using that money if he chooses. Also, the opportunity to ask for a higher compensation from a court remains with him even after accepting a compensation cheque. In UP, the circle rates should be brought more in line with the actual transaction values to get it reflected in compensation cheques.”


                    “It is good that this policy has sought time-linked completion of projects. This is the most important thing for real estate development anywhere. All plans under implementation ought to be timelinked or time-bound with penalty-linked deadlines. A few things that need urgent attention are law and order to meet security needs, removal of bureaucratic delays, dismantling of development authorities which regulate the industry and delay progress, public-private partnership, single-window clearances for the real estate and construction industry, power, water and sewerage to be developed to meet the future demands,” Manoj Gaur, of JP Group, says.


                    Prashant Tiwari, MD of Prateek Group, says: “UP has been definitely trying to compete in the last couple of years by bringing in development schemes through integrated townships and high-tech cities.


                    “But UP’s urban development policies should be more favourable to the developers. They should be more stable and well defined. Cities like Moradabad, Lucknow, Meerut, Kanpur, Varanasi, Allahabad, etc, have good potential for real estate development.”


                    Land acquisition policy of Uttar Pradesh


                    Builders and developers can talk to the farmers directly. Those farmers who do not wish to claim the compensation in cash will have an option where 16% (plus 7% for Pustaini) of the total area of the acquired land will be returned free of cost after development. Such land shall be transferable. Fifty per cent of the developed land given to the land owner shall be for residential use and 50% for nonresidential use (like industrial, institutional, commercial or mixed use).


                    The body/undertaking or authority concerned shall itself determine the relative percentage of non-residential use.


                    The landowner shall have the option of retaining a part of the 16% developed land given to him and obtain cash compensation for the remaining land on the basis of mutual agreement. The rates of cash compensation shall be declared by the acquiring body at the beginning of the project. The land given to the landowner shall be free from development fee or land-use change fee due to the development authority. In addition to the above package determined by the mutual consent, the following benefits shall also be available to landowners.


                    As annuity


                    Every landowner, whose land has been acquired, shall be given annuity at Rs 23,000 per acre per year in addition to the compensation amount. The amount of annuity shall be increased by Rs 800 per acre every year. The landowner, who does not wish to avail this annuity, shall be given Rs 2,76,000 per acre in lump sum as rehabilitation subsidy.


                    Land acquisition policy of Haryana


                    Builders and Developers can purchase land directly from farmers. For this, builders/developers have to obtain an NOC from HUDA (Haryana Urban Development Authority).


                    Like in UP, the state government will not interfere in the deals being negotiated with the owners of the land. The landowners will be paid annuity for 33 years apart from the usual land compensation. The amount of annuity will be Rs 18,000 per acre per annum.


                    Annuity of Rs 15,000 will be increased by a fixed sum of Rs 500 per year. In respect of land acquired as per policy for setting up of SEZs/ Tech Cities/ Tech Parks, in addition to rehabilitation and resettlement package, a sum of Rs 30,000 per acre per annum will be paid for a period of 33 years by private developers and this annuity will be increased by Rs 1,000 every year.


                    QUICK BITES


                    IN THE NEW ACQUISITION POLICY, DEVELOPERS CAN ACQUIRE LAND DIRECTLY FROM FARMERS AND ACQUISITIONS CAN ONLY HAPPEN WITH THE MUTUAL CONSENT OF 70% OF THE FARMERS IN A GIVEN AREA

                    -TOI

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