DELHI: With the three development authorities of Noida, Greater Noida and Yamuna Expressway having revised their land prices, the dream to build or buy a house of one’s own has become costlier. These authorities have raised the land prices by up to 40% of their current rates.
The Greater Noida Industrial Development Authority (GNIDA) has prepared a new formula for land procurement under which it can directly purchase land from the farmers. GNIDA has sent this policy to the Uttar Pradesh state government for its approval.
Under the new policy, landowners or farmers will have two options: either they directly sell their land to GNIDA or go through the provisions of Section 4/17 or Section 6/17 of the land acquisition policy. For direct land purchase, farmers or landowners will get an additional 20% of the declared compensation (Rs 1,512 per sq metres) as a no-litigation bonus. In addition, they will also benefit from the rehabilitation policy.
GNIDA has already raised by 45% its existing budget for infrastructural development and social services, which now stands at Rs 7,005 crore in the financial year 2013-14. GNIDA and the Yamuna Expressway authority have also increased the compensation rate by 15% to be offered to farmers for acquisitions, besides providing a host of other benefits to them.
New Noida Metro Rail Corporation
The Noida authority has announced the setting up of the Noida Metro Rail Corporation (NMRC) as a special purpose vehicle to facilitate the construction of a proposed Metro line between Noida and Greater Noida.
The Metro line, first mentioned in January, will be constructed without DMRC’s help, and is an initiative of the Noida and Greater Noida authorities.
Rama Raman, the chairman and chief executive officer of GNIDA, says: “The NMRC will see an initial investment of Rs 1,000 crore. In an earlier board meeting held in January, a 29km-long Metro line was announced between Noida and Greater Noida, at an estimated cost of Rs 5,064 crore. To facilitate this, the Noida and Greater Noida authorities have begun the process of setting up a special purpose vehicle, the NMRC, which will see an investment of Rs 1,000 crore.
We will soon approach the registrar of companies, Uttar Pradesh, for clearance and work on the NMRC will begin soon. The board passed an MOU with regard to the extension of the DMRC line between Botanical Garden and Kalindi Kunj. The 3.96km line is to be built at a cost of Rs 845 crore. We have already passed the MoU from our end and will seek the clearance from the UP government. After that, the proposal will go to the Union urban development ministry for final clearance.” Around 22 stations have been proposed to be built on this Metro line, which will run along Noida-Greater Noida Expressway.
The line will between City Center, Sector 32 and Depot Station (Bodaki). The proposed stations on the route will include Sector 51, Sector 50, Sector 78, Sector 101, Sector 81, Dadri Road, Sector 83, Sector 137, 142, Sector 143, Sector 144, Sector 147, Sector 153, Sector 149, Noida and Knowledge Park 2, Knowledge Park (future), Pari Chowk, Alpha 1 Alpha 2, Delta 1 (future), Knowledge Park 4, and Depot Station at Bodaki, Greater Noida.
The authorities estimate that nearly 65,000 passengers will use the Metro every day. The proposal to extend the City Center Metro line by 6.67km to Sector 62, touching NH-24 has also been approved. The DPR for this much-delayed project has been forwarded to the UP government. In addition, the Noida-Greater Noida authorities have also decided to go ahead with civil work on the Metro link between Noida and Greater Noida West (Noida Extension).
FAR to be increased
Rama Raman says: “The total cost of the extension of the existing Metro track comes to around Rs 6,000 crore. The authorities will raise the funds through real estate development. The authorities will increase floor area ration (FAR) from existing 2.75 to 3.5 in certain areas. For this, the authorities will develop special corridors along Noida-Greater Noida Expressway. The FAR would be sold in group-housing projects dotting the expressway. The Noida authority has announced an increase in FAR allowed for land within 500 metres of the Metro corridor along the Noida-Greater Noida Expressway. The authority will increase the FAR by 0.5 for building within 500 metres of the Metro line.”
Rakesh Yadav, the managing director of Antriksh Group, says: “This will increase the value of land near the Metro line. The increased revenue will aid development work including that of the proposed Metro lines along Noida-Greater Noida Expressway.”
Land price goes up
In Noida, the allotment rates of group housing, residential and institutional properties have been raised by 15%, commercial and industrial land rates have gone up by 30% and 11.25%. In Greater Noida, the allotment rate for land across all categories, except industrial, has been uniformly revised by 8.53%. The Yamuna Expressway area has also seen a raise in allotment rates of all categories of land by about 15%. The allotment rate for industrial properties remains the same as last year.
In July 2012, the development authorities had raised the rates between 7.5% and 40%. The raise is especially important for the GNIDA, which is reeling under a major cash crunch.
“The increase in rates was essential considering our current funds shortage. The land row in Greater Noida West also imposed an extra burden on the authority in the form of enhanced compensation and rehabilitation packages for the farmers. Besides, many development projects have remained stalled for months,” Raman said.
According to the new allotment rate, residential properties in Noida have been revised by at least Rs 8,115 per sq metre in A Category sectors like 14,14A, 15A, 17, and 44 and by Rs 2,950 per sq metre in E Category sectors like 102, 115, and 158. Grouphousing flats in Noida have are costlier by almost Rs 11,065 per sq metre in A category areas and by Rs 4,180 per sq metre in E category zones. In the institutional category for IT/ITeS properties, Noida buyers will have to shell out Rs 33,940 per sq metre now. For plots in Phase I and III industrial areas of Noida, the allotment rates are Rs 20,990 and Rs 7,740 per sq metre.
Now residential plots in Greater Noida will be costlier by almost Rs 1,592 per sq metre while for commercial space, an extra Rs 3,155 per sq metre will be charged. The new allotment rates in Yamuna Expressway Industrial Development Authority (YEA) have also been increased between 14% and 18%.
Impact of increased price on realty market
R K Arora, chairman and managing director of Supertech Limited, says: “Undoubtedly, it’s a steep raise and going to affect the buyers and investors who were looking at this booming region as a reasonable and affordable zone. It can be detrimental to real estate business. The fast developing zones like Noida, Greater Noida and Yamuna Expressway are known as prime and ideal location for affordable range houses. Now it is no longer the same due to the rise by 8.53-30% in allotment prices across all categories of land.
The burden will fall on the customers and they need to pay more now.”
“The increase in the allotment rate is a bit too much as a marginal increase could have been a better idea. Though the present buyers need not worry about the increase in prices, in new projects there can be an increase in prices. Buyers would be affected by the increase in prices. People who have been buying smaller plots of 100, 200, 300, and 500 sq metres will now be more interested in group-housing projects due to the increase in prices,” Ashok Gupta, managing director of Ajnara India Ltd, said.
Deepak Kapoor, director of Gulshan Homz, said: “The increase has become a periodic feature which happens every year. The effect is yet to be calculated but it’s certain that future projects will become costlier. The main issue to be looked into is the feasibility of affordable housing, which looks diminishing. With such increase in land rates every year, affordable housing will become a distant dream.”