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Noida Real Estate:Few Points to take care

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Noida Real Estate:Few Points to take care

Last updated: February 27 2010
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  • Noida Real Estate:Few Points to take care

    Dear All
    I was away so couldn’t reply to personal messages sent by few people. I said that I will write on Noida Real Estate once all projects will be available in the market. Every day new project is coming but still 8-10 projects pending and should come in market in another 15-20 days. 5 projects in Sector 78 , one project in Sec 45, 2 projects in Sector 107, 2-3 townships in Greater Noida and 2-3 more projects in different sectors of Noida.
    I saw lot of good discussions going on this forum on different topics like is it time to invest ?? , Which area is going to be good in future?? What should be criteria to invest in any project??Why few projects coming up with premium from others?? why so many projects in Noida?? Why authority is giving so many plots on auction? Payment terms for builders etc…
    My 2 cents on these things:
    1.Why so many projects in Noida and why builders are taking plots in auction ??
    There was no plot available for housing society in Noida from lat 4-5 years and Government was trying to sell lands/plots in Greater Noida and till 2007/2008 things were going good in Greater Noida with assumption that International airport will come, Wipro/NIIT/Infosys will open their offices and more and more big IT companies will come to Greater Noida and “Greater Noida” was big buzz in market with exent planning, wider roads, future appreciation but “Recession of 2008” affected Greater Noida and reverse engine started there. There were no buyers in Greater Noida and slowly builders started giving back their plot to government. Government needs money to develop the things and there was no source of money for Authority as BTPT episode raised the concerns about money flow in these areas. Now government was not having any other options to find out the plots in Noida for builders and builders were waiting for projects in Noida from last 3-4 years as they were aware that there is lot of demand in Noida for good locations.
    Builders are in business so they always need to run show by having few projects in running conditions so all builders started taking plot in Noida and government was having lot of available lands in Noida so demand/supply between builders and government was on equal stage. If you see, except Amrapali/Gardenia all builders are having just one plot in Noida and even in the case of 3C, he bought another plot(sec 110) once sector 100 project was almost sold. If you count numbers of builders in this area still few builders are without any plot in this “dream run of authority” like Eldeco, Omaxe , Assotech etc. Reason for most of the builders having plot in auction was “Payment plan flexibility” given by authority in Noida for all new plots. You just need to have turnover to clear technical bid and having around 25-30 Cr in your account to buy plot worth 110 cr(approx. 50,000 sq meter) and if you are coming up with JV then you just need 10-15 cr to start a project in Noida. Few builders started with assumption that they will sell flats before starting of construction and they will not need extra money to make projects and this is a dangerous sign for buyers.

    2. What options are available to buyer ?
    Due to lot of projects and competition there is lot of pressure on rates and due to this it is sure that quality of construction will be compromised to match the rates in market. Most of the customers try to maximize their budget while buying house so they always put focus on “final rates” they are getting and don’t give importance of project and its features. Now it is catch 22 situation where if builder is selling flat on premium to other projects, it is tough to find out lot of buyers and if he is selling on market rate then they can’t maintain the quality they are thinking so time to be more careful. Situation is totally different than Year 2005/2006 because that time builders were having plots from authority after paying more than 50% amount so financially projects were viable but now builders have just paid 10% money to authority and depends only on “Sell” and if “sell” is not going to happen either projects will scrapped or they will be delayed by few years. Having lot of options is always good but it makes situation very tough also.
    3.How to select project to invest and criteria to find out good projects?
    Very tough question and decision. As few senior members of this forum said that one should invest once construction is on pick but again then you should be ready to pay more money and it is not possible for everyone to pay those “5 to 10 lakh” extra money. I know few of my friends who were in this mindset and they never invested because they were always 5 to 10 lakh short whenever they were sure to buy house. One can buy in this market with proper research and information. These are few things one should take care :
    • How many under construction projects builder is having and what is the stage of those projects ?
    • What is the financial liability that builder is currently having and what’s future plan to raise fund if needed?
    • Which banks are funding current projects and on what payment plan?
    • What is the delivery track record of builder and quality of construction in old projects?

    It is better to invest in builders who are running few projects as they will be still in position to bear the recession if it is going to come.

    4.Future rates in Noida
    As I wrote around 2-3 months(that time few people objected also) , rates in Noida is not going to increase in next 1-2 years even few projects will be available on little bit cheap if you add interest you are paying to banks but availability of good flats will reduce with time. For example , take example of Pan Oasis project where you can still get flat in same rate those were available 2-3 months before but that time it was easy to get flats on lower floors and now those flats are available on higher floor but in my view it is big difference because you are going to stay in that flat for your rest life and spending life on 6th floor and 16th floor is having big difference. I am not saying that one should buy immediately starting of the bookings in any project but one should not be very late also.
    Rates in Noida will increase only after 2-3 years and that also when projects will be in stage of possession so people who are looking for pure “investment” better to be away from market for few months.
    5.Areas to invest in Noida
    Now there are 3 areas to buy house in Noida, Projects on express highway those are after 93 A sector (like Sector 135,137 etc.) , Second projects those are on express highway but before 93 A(like sector 110,104,107,45 etc.) and third projects inside Noida(like sector 120,121,75,76,78 etc.)
    Based on your need ,you can take decision to buy flat in those 3 areas. Next week once all projects will be out in the market, I will put my observations on different projects in Noida.
    6. From where demand is coming ?
    As i wrote from last 3-4 years there was no new grouping housing plot in Noida so there were lot of buyers who were waiting for projects in Noida, Due to good layouts(having 2BHK+study in approx. 1100 sq ft) lot of buyers from Crossings/Indirapuram started coming to Noida projects, implementation of 6th pay commission for employees of PSUs like NTPC, ONGC, BHEL etc , Double earning family structure(husband/wife both working),Parents giving money of their retirement to their children to have "dream" house etc. made lot of demands in Noida but till when? it is big question to ask. Will this demand continue for next 1 Lakh flats ?? In my view, demand is getting reduced slowly and it is visible. Initially projects amrapali sappire, Gardenia sec 46, pan oasis, homes 121, Prateek etc. sold very fast but new projects are getting very slow response. Even after so much advertisement new projects are getting very slow response and it will continue in this way because buyers are going to divide in different projects. Projects who are going to good financial background, good facilities, layouts, location and few unique features will survive and will get good response.
    Thanks


  • #2

    #2

    Re : Noida Real Estate:Few Points to take care

    Hi! Searching property,

    What do you think about Amrapali zodiac as a location and as a project?

    Comment

    • #3

      #3

      Re : Noida Real Estate:Few Points to take care

      Thanks for informative post! Very important point while investing is not to expect appreciation in next 3-4 years. Location of the apartment holds the key e.g. front/park/road facing apartment with good natural daylight will have better resale value.

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      • #4

        #4

        Re : Noida Real Estate:Few Points to take care

        Thanks searching.

        I will await your follow up analysis - I know it will be great as usual
        Venky (Please read watch a or before posting)

        Comment

        • #5

          #5

          Re : Noida Real Estate:Few Points to take care

          Hi

          Hi your quote was quite informative and I am sure it will be beneficial for all of us. Give us more advise on such issues. I have purchased 3rd floor in Pan oasis, how is the project, do you think it is a wise decision

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          • #6

            #6

            Re : Noida Real Estate:Few Points to take care

            As usual wisdom from searching....deep and thoughtful analysis

            Waiting to lay my hands on the upcoming post next week.

            Comment

            • #7

              #7

              Re : Noida Real Estate:Few Points to take care

              Thankx Searching for this informative post.

              Comment

              • #8

                #8

                Re : Noida Real Estate:Few Points to take care

                Thanks Searching. Please comment on One Hamlet of ATS in sector 104 being launched shortly.

                Comment

                • #9

                  #9

                  Re : Noida Real Estate:Few Points to take care

                  Thanks Searching propery Good post. Any view on independent plots like Jaypee kensington plots.

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                  • #10

                    #10

                    Re : Noida Real Estate:Few Points to take care

                    Thanks

                    Thanks always, No need to say informative post and you are really having lot of knowledge about Noida real estate. I wonder from where you got so much information and then put your analysis. Waiting for your next post as I am planning to buy house in Noida.

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