Real Estate in Noida : ‘What to’ and ‘Where’ to Buy

Noida was established in 1975 to fulfill the need for an integrated industrial township in the region around New Delhi.

Now more than 40 years later, Noida has easily surpassed the expectations of the men and women who mandated its creation. With a disproportionately high number of information technology companies present in Noida and the surrounding areas, Noida has often been quipped as the IT capital of the NCR.

The city has modern, futuristic IT parks, employing thousands of workers in addition to residential property which at first glance you could be mistaken to think were in Miami or the best parts of Los Angeles.

All this seemingly makes Noida a great place to live and work. Let’s look under the hood and try to understand how attractive it really is to own property in Noida.

Let’s look at one particular sector widely considered among the poshest in the city. Sector 93A, is the location of one of the most luxurious apartments in Noida with many great schools in the vicinity. On average property prices here have appreciated by less than 1000 Rupees per square foot over the past 8 years and have declined by 8 % over the past 6 months. Residential property in Noida, it seems may not necessarily be as attractive as many of us may believe.

When flats in Noida, at on of the most highly sought after and admired neighborhoods in the city exhibit such poor performance what does that say about the rest of the city?

Many of the top new projects in Noida at locations like Sector 121, 134 and 119 have shown extraordinary appreciation with one or two residential projects double the price it was 6 years ago. Though most of these new projects in Noida still cost significantly less than a crore, an astute investor could have doubled his portfolio had he the prescience to invest here a little more than half a decade ago.

To take another example, luxury apartments in Noida which cost over 1 crore, located at sector 78 have also greatly appreciated with one project by Mahagun appreciating over 150% since 2010. Clearly property in Noida is still vibrant with many takers flocking to buy flats in Noida.

How do we reconcile these contrary facts? Numbers don’t lie; they are not beholden to emotions or fits and they don’t take sides. One reason may simply be that demand for luxury apartments in Noida is tapering, with fewer buyers willing to purchase at upmarket locations like Sector 93A and others who still see property in Noida well priced for middle income home buyers.

Possibly another more accurate reason pertains to the opaqueness of real estate transactions. In mature developed sectors there may be a substantial transfer of black money between the parties involved resulting in the sales price publicly announced to be lower than the money actually exchanged between the parties involved.

In upcoming projects in Noida in newer neighborhoods; the large volume of buying and selling activity by enhanced number of first time home buyers and sellers, purchasing and selling homes paid for by bank loans which lead to greater transparency and foresight of real estate prices may be driving up prices, though not necessarily perniciously.