Noida Ext: roadside vendors selling flats

Where roadside vendors hawk flats

Surojit Gupta & Avijit Ghosh, TNN, Feb 14, 2011, 12.54am IST

GREATER NOIDA: Tucked away on the other side of the Hindon river and surrounded by lush green farmland where yellow mustard flowers sway, the nondescript 'Noida extension' area has emerged as ground zero of real estate business.

Here, the air is thick with dust raised by overloaded trucks ferrying brick and sand. Heedless, young men sporting smart caps and smarter T-shirts furiously wave brochures of the numerous housing projects in the area. They lunge dangerously at any passing car to snatch precious clients from lurking competition.

On giant hoardings, cricketers M S Dhoni, Yuvraj Singh, Suresh Raina and singer Kailash Kher urge you to buy your "dream home". Walk into any of 50-odd real estate booths on either side of the road from the Noida City Centre Metro station and glib agents will offer a "perfect home" for every middle-class pocket.

Many flats have already been booked, they claim. "Some government companies have completed bulk bookings," says Rajesh Kumar, a real estate professional. The average rate ranges from Rs 1,900 to Rs 2,250 per square feet. "It was around Rs 1,650 in April 2010," he says. To every prospective customer, they say the rates will shoot up further.

To moderate such exuberance, the Reserve Bank of India has tightened norms for housing loans in recent months. Home loans have become costlier as the RBI has raised interest rates seven times since March 2010 to contain inflation.

"Residential property prices in metropolitan cities have gone beyond the pre-crisis peak level (of 2008)," the RBI said in its second quarter review of monetary policy in November. "Although income levels of households and earnings of corporates have continued to rise, a sharp rise in asset prices in such a short time causes concern."

Analysts say the spike in real estate prices in some parts of the country is a real concern and sales volumes have remained flat as buyers stay on the sidelines. "Overall, the market sentiment for the real estate sector is weak and investors are sceptical about investing in real estate stocks. If interest rates rise further it will only add to the weak sentiment," Niyati Jhaveri, analyst at brokerage firm K R Choksey said.

"Prices in some parts of Mumbai and Delhi NCR are higher than the pre-global recession levels. There are a lot of enquiries but these are not translating into sales," she said.

But these concerns don't seem to bother the agents in 'Noida extension'. Brokers, who prefer to call themselves facilitators, say at least 30 housing projects are under construction in the area and another 20 are in the pipeline. The "dream homes" will rise on land that once belonged to Iteda, Bisrak, Ahmedpur and other surrounding villages.

The builders include well-known real estate firms. "We get about 150 clients every weekend. People come even after the sun has gone down. Sometimes we show them the brochures using our mobile phone as a torch," says Kumar, a real estate broker who has been doing business from a dusty stall by the roundabout for the past year.

Builders have spared no efforts to capture prospective buyers' mindspace. Every 15 minutes, a text message urges you to invest. FM radio stations are buzzing with real estate advertisements. So are newspapers. The entire NCR is awash with posters, banners and advertisements announcing the arrival of 'Noida extension' as a hot real estate destination.

They conjure up a world of unlimited luxury. Sauna, Jacuzzi and tennis courts are regular. A more upmarket project even promises a forest. Promises of multiplexes and world class shopping malls are thrown at prospective buyers with remarkable regularity.
The real estate agents proffer two reasons why people are interested in buying these homes: One, because they are cheaper than anything the average middle-class citizen can buy in Delhi and, two, because the area promises good returns in a couple of years' time.

But in any business, especially real estate, there's always a gap between the best possible scenario and the most likely one.

"There is a huge oversupply in that area of Noida. A lot of land has been given and developers are promising delivery in 12-18 months. But that is not going to happen. It will take a long time for these projects to sell," said Ambar Maheshwari, head of investment advisory at DTZ, a real estate advisory firm.

There are other hard truths not every customer knows about. For instance, what is being sold as 'Noida extension' is actually part of Greater Noida. Officially, no place called 'Noida extension' exists.

At the moment, Greater Noida doesn't figure in the Delhi Metro's expansion plans. But the general buzz generated by brokers is that the Metro will roll into Noida extension by 2015.

"After three years, the builders will start completing their projects. In three years, the area will be properly developed," claims Virender Chaudhary, a broker. "This is the best in Noida," Chaudhury, who hails from Moradabad, says in broken English. The agents say issues related to water, electricity, security and connectivity will also be gradually sorted out.

The promise of a middle-class paradise attracted 29-year-old IBM employee Vivek Verma to book a small flat in the area. "I did my research on the internet, spoke to friends, watched TV programmes on property. That's how I came here to buy this flat," says Verma who originally belongs to Bulandshahr.

Verma's is not an isolated case. Government employee Naveen Tiwari says he wants to invest in one of the more affordable housing projects here. "Homes in Delhi are beyond our reach," he says.

There lies the nub of the issue. For every middle-class Indian, there's no greater dream than owning a house. Projects in far-flung areas such as 'Noida extension', allows them to dream of a home at a relatively low price but with risks.

What if the infrastructure schemes don't turn out as projected? "If everything is ready, why would builders charge Rs 2,000 per square feet? They will charge Rs 6,000 per square feet," says broker Chaudhary.

What he means is that risk is in-built in the rate, grab it or leave it. Thousands have no option but to take the plunge.

Read more: Where roadside vendors hawk flats – The Times of India

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