Developers React to Noida’s Circle Rate Hike
Indicating a sharp rise in Noida’s property prices in the coming days, the Noida Authority, in its latest meeting, has decided to increase the land allotment rates for residential plots, group housing, and institutional plots by 6-10%. In a continuation of the policy stance from last year, the Noida Authority, in the previous year, has also surged the circle rates by 10-15%. Property buyers searching for the right property to construct homes and industrial set-ups will now have to extend the upper limits of their budgets to purchase a property in Noida. Nonetheless, it might be a relief for some end-users that property rates of the A-Plus Category residential sectors are maintained as usual.
Sanjay Sharma,Director of SKA Group, said, Noida’s Circle Rate Hike was a predictable and overdue decision. The early investors who had purchased properties at the older rates will now witness considerable profits from their investments. For those looking to invest presently, it is best to invest in existing and upcoming residential projects. Factors like circle rate hike and growth in the real estate industry will cause new projects to be marked at a higher price in the foreseeable future. With recent major developments like the advent of Jewar Airport in the vicinity, it is possible for buyers to prefer investing in regions and projects in Greater Noida due to its affordability and future growth prospects.
Mr Salil Kumar,Director-Marketing and Business Mangement, CRC Group, commented, Noida’s Property Prices will inevitably rise after the circle rate hike announcement. This might encourage homebuyers to invest in Greater Noida, which is close proximity. Homebuyers will be more inclined to invest in existing inventories and ready-to-move-in projects. Price Affordability and Infrastructural Boom are two important considerations which might persuade homebuyers to invest in the region.
The circle rates have been revised twice in eight months, the last one happened in August. Taking a much lower hike stand this time, the land rates increased by 10-20% in August.
The hike in circle rates by Noida Authority on April 23 even though will affect property prices, but it won’t make a significant difference in the property prices for the homebuyers as it brings it close to the prevailing market rates. However, one should note that the Noida Authority also increased the allotment rates by 10 to 15 per cent last year. Add to it the current 6 to 10% increase; the quantum of hike in the last one-and-a-half year is quite high. This is a cause for concern said Mr Amit Jain,Director of Mahagun Group.
Amit Modi, Director County Group & President Credai (WUP) stated,While we understand that the authority needs revenues to develop the city’s local infrastructure, we believe that the timing could have been better to raise the land allotment rates. Assuming from the broader context of steep-high inflation and back-to-back interest rate hikes, the rise in circle rates might dampen property buying spirits. However, Noida is still a lucrative investment avenue which will witness massive growth in the coming years. Nonetheless, compared to last year, the Noida Authority has taken a much lenient stand but, irrespective of anticipations, went for another hike in land allotment rates. This might cause a slowdown in the plot-purchasing activity in Noida’s real estate markets for now.
The Noida Authority has also specified that there is no increase in the allotment rates of residential flats and commercial properties built and leased by it, respectively. On the other hand, residential plots in the E category have seen a maximum rise of 10%, whereas plots in A, B, C, and D categories saw a hike of 6%.
Deepak Kapoor, Director, Gulshan Group says the increment in the allotment rates announced by the Noida Authority might cause a snag in the property purchasing, more significantly plots. The demand for plots is rising for industrial and residential development in Noida and Noida Extension. The rapid increase in prices of plots in Noida could push end-users to explore alternative options in other regions.
