Land allotment rates for residential and institutional have been hiked by 15% leaving realtors unhappy.
The residential market of Noida has always been hot destination for mid-segment buyers as the city offers multiple options in the category of affordable homes in entire NCR realty arena.
However, a recent move by the Noida authority to make hike land rates of residential and institutional land use categories by 15% has created agitation in developer fraternity. This hike is not applicable on commercial land use keeping in mind that higher prices would take away investors form the market.
The decision of New Okhla Development Authority may bring cascading effect on property prices in Noida. The registry department also updates its charges after the authorities fix the prices. This will change the sentiments of buyers who have planned to buy homes, say realtors.
Moreover, the other two parallel development authorities — GNIDA and YEIDA — are not in view to increase in previous land rates, hoping the locality will take home buyers from Noida.
The new land rates are effective from April 1, 2016 on residential and institutional land categories.
Deepak Kapoor, president CREDAI, Western UP, says, “At a time when developers are struggling to cope up with slow sales, this increase in land rates has come as a big disappointment for developers. It would now be costly to buy land parcels for developers which eventually would result in costly projects for buyers as well.”
Harish Arora of Saksham Services says, “Such course of action by local authority gives a setback to new home buyers and trading investors too, especially when realty market is already lingering by the absence of potential buyers. We are shocked with the decision of Noida board to pass a steep hike in rates of residential and institutional land. However, no change in commercial land allotment rate will keep interest alive of trading investors”.
Segment-wise new prices:
The land use area in Noida is divided into five categories – A, B, C, D and E for residential, commercial and industrial lands.
- Category ‘A’ is fully developed residential clusters and the land allotment rates in this area are corrected from Rs 68,750 to Rs 81,400.
- Land use in ‘B’ category has received the hike from previous Rs 47,920 to Rs 56, 740. Sectors like 15, 19, and 20,21,23,25 to 29 etc. falls in this category.
- Residential sectors in class ‘C’ will also have new rates Rs 41,320 to Rs 34,900 prior.
- Prior to new notification, the land allotment rates in category ‘D’ residential sectors were Rs 29,170 and now it is increased to Rs 34,540.
- Category ‘E’ is newly developed residential sectors of Noida and land rates here hiked from Rs 25,000 to Rs 29,600.
- Group housing segment has now new rates between Rs 41,940 to Rs 1, 11,000 which was between Rs 35,420 and Rs 93,750.
Property prices likely to increase
According to realty experts, this decision will put extra load on home buyers as the property prices will uproar with hike in land allotment tax. As the land cost is vital factor of an entire real estate project. Hence, homes in Noida are going to be costlier and it will have huge impact on the exiting market.
“The hike in land allotment rates can have adverse effect on the real estate market of Noida. The increase in prices would discourage investments in the region and would leave an extra burden on the pockets of home buyers and investors. As the land rates will now cost more, it would bring negative sentiments in the market and can dampen the investment and growth prospects in Noida” Kapoor said.