Realtors in the rapidly expanding affordable housing market in the National Capital Region (NCR) plan to increase the cost of residential flats as a result of the Noida authority's 20–30% increase in land prices.
Realtors in the rapidly expanding market for inexpensive homes in the National Capital Region (NCR) plan to increase the cost of residential units as a result of the Noida authority's 20–30% increase in land prices. The cost of home loans is rising because to frequent repo rate hikes, adding to the developers' already heavy burden of escalating raw material prices. And it is now anticipated that the authorities' most recent action will make things worse.
Leading developers in the area, as well as industry experts, told Business Today that realtors are now forced to raise the cost of residential properties. The Noida-Greater Noida market in the NCR has been providing middle-class families with considerably less expensive housing options.
The Noida Authority has announced increases in land charges that will impact the prices of properties in the residential, industrial, group housing and IT-ITES sectors. The hike of 20–30% across a number of categories will undoubtedly discourage buyers from the real estate market because the arrangement would not be one that was ostensibly advantageous to them. The buyers will ultimately bear the costs because the housing and commercial units of the planned projects would be offered at exorbitant rates, according to Deepak Kapoor.
The increase in land prices in Noida will discourage buyers from making land investments, according to Amit Modi, president of CREDAI Western Uttar Pradesh. "Across a number of land categories, the land rates have grown. This will have an impact on the costs of vacant land for residential, commercial, industrial, and group housing. In terms of upcoming developments, it is clear that the cost of apartments will increase because the cost of the land will account for a large portion of the project's cost. The PM's goal of housing for everybody will be jeopardised because it will ultimately be passed on to the end users, Modi lamented.
In a city where affordability has been the key driver of expansion throughout the coronavirus pandemic, Vikas Wadhawan, Group CFO for real estate marketplace and analytics platforms Housing.com, PropTiger.com, and Makaan.com, believes the move will considerably increase land prices. The market had been struggling with cases of developer bankruptcy and project delays earlier, but it picked up speed after homebuyers descended upon the market following lockdowns.
"Unlike most states, the government of the state (of Uttar Pradesh) has also declined to consider the request for a decrease in the circle rate and the stamp tax, despite the fact that many of its counterparts across the nation did so to support pandemic-affected real estate. This action has a significant impact on the market sentiments, which are still positive, together with recent RBI repo rate hikes of 140 basis points since May and the rising cost of raw materials. Consequently, the government should exercise caution when making such decisions,' he said.
Prices of essential raw resources like steel, cement, copper, and aluminium have increased since the COVID epidemic started in early 2020. The war in Ukraine significantly disrupted the global supply chain in 2022 as construction activity resumed after the lockdown, driving up the price of key goods by as much as 125 percent since mid-2021.
Residential housing prices are expected to have increased by 5-8% between late 2020 and now, according to industry estimates.
The Reserve Bank of India's repeated increases in the prime lending rate (repo rate), which have caused house loan rates to rise, are another issue that has unnerved realtors. In the past, the rapid rise in home purchases has been largely attributed to historically low home loan rates.
While this increase will force buyers to spend money on real estate investments, according to Ajay Rakheja, President of Commercial Real Estate at Berkshire Hathaway HomeServices Orenda India, it will also help developers in the long run to slow the growth in input costs.
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