Reasons For Sudden Appreciation In Real Estate Prices In India.

To many this wouldnt be a new thing, I am talking about the sudden increase in residential property prices in Indian metro cities between the periods 2003 to 2007. On a macroeconomic side, it is very well documented that prior to 2003, the property prices were significantly depressed and they shot up post 2003 on account of huge demand driven by increased jobs in sunshine sectors such as IT, Auto, and services. This coupled with relatively short supply gave further rise to real estate prices.

But how did prices go up so suddenly to the tune of almost 8 – 10 times. Well, I struggled a bit to understand that phenomenon and after years of being in real estate sector, here are my two cents.

Firstly, on account of increase in jobs as well as increase in income levels, the demand for housing was tangible. However, the supply was limited and new infrastructure has to be created to cater to that rising demand. That new infrastructure (if we talk about Delhi NCR) could only be developed in new locations such as Greater Noida, New Gurgaon, Golf course extension road, Greater Faridabad, Far away Ghaziabad, and so on.

Now, simple calculations will tell us that cost of construction is about rupees 1200 per square feet (I am talking about high quality construction at current prices). Add land prices to that number, and you would arrive at rupees 1300-1400 per square feet of developed land in the new locations mentioned above. So, how could builders of these new developments in those locations sell those properties for about Rs. 2500 3000 when you have properties being sold in primary (already developed) locations such as Faridabad, Noida, Gurgaon, Ghaziabad being sold for Rs. 1800 2000 per square feet. No guessing here, the prices have to move northwards in primary locations to justify the Rs. 2500 3000 in new locations.

But how do prices move northwards in primary locations? Well, tried hard and after spending some years in real estate sector came to realize that it needed vitamins, injections, or even better steroids. To illustrate it very simply, take a case of Noida where land rates in 2003 were hovering at around Rs. 800 1000 per square feet in most localities. All of a sudden builders ABC, XYZ, and few more enter the market and purchased the land plots for Rs. 3000 4000 per square feet and I am talking about the primary Noida locations here. What it meant for those builders was loss of money (maybe 50-100 crores) having bought the land at high prices when same was available at very low prices. What does it mean to Mr. Sharma, who believed that since Mr. Verma has sold his plot at Rs. 4000 per square feet, that he wouldnt sell it for anything less than the Rs. 4000. And rest as they say, residential land price of Rs. 4000 per square feet became the market price in no time.

Now, the very same builders were developing the new locations and now that the price in primary location has already been put on steroid, they can charge Rs. 2500 3000 in new locations. So, for the loss of Rs. 50-100 crores, they can now easily make thousands of crores. No fault of theirs, in a capitalist world maximizing value is the key and they did it in open market. However, presence of real estate regulator could have avoided this steroid and maybe saved the common man with pains of going to new locations when most jobs are in primary locations. Given the income levels in major metros, can you justify the prices of real estate? No, and thats where the real estate regulator could have been helpful.

Latest Residential Projects launch in Noida

The real estate market is flourishing seemingly in Noida and Greater Noida. It is so because asset is always tangible, solid and beautiful. It is artistic from our standpoint we just love Real Estate. So making investment in Real Estate market proves always a profitable deal.Beneficial Future deals is the prime factor why people are showing their keen interest in property and coming forward to invest in Real Estate sector. We could see the large number of potential commercial and residential project in Noida. It has become the most preferred dwelling unit in Delhi/NCR. People have shown their great interest in buying their dream home in this area.

Noida has emerged as a one the fastest growing residential hub in past few decades. It is also known as the emerging business capital of India. It is also a fine hub of IT sector; BPO sector, Institutions and many more corporate sectors have set their offices in Noida and Greater Noida. If you are planning to buy or wanted to invest in the real estate then it is one of the best locations where you can make your valuable investment. Why we are focusing upon this particular factor, it is only because location is one of the vital factors that affect your surroundings. It matters a lot in which location you are buying your shelter. Everyone wish to live in secured and gated community and Noida has been developed with the same prospective to provide you the three layer security. Let us have quick look on the two of the best residential project of Greater Noida.

Supertech Romano is the new residential project by the leading real estate builder. After the successful launch of North Eye and Supernova, we received a huge demand to launch the residential project with new concept. So we come up with the entirely new and different concept that no one has given before to Noida. This is the one kind of advancement we want to bring in the Indian Real Estate market that Noida has not seen Ever before. Based on the Rome theme make you feel that you are living in Rome city. Its interior design narrates the tale of Rome civilization. Make your private heaven in Rome with Supertech Romano.

Another interesting residential project I would like to mention here is Gaur 14th Avenue. It is also the creation of one of the India’s best and renowned real estate builder that is Gaursons. It is located in the prime location of Gaur city-2, Greater Noida. The project is sprawled over large area of land and near about one third of the total land area is kept open to receive ample amount of natural heat and light.

Advantage And Disadvantage To Invest In Real Estate Market Of Noida.

Noida has the real estate market, that the correction has been performed, and Mumbai was the last in line. Both have recovered after the introduction of recovery plans and direct action by the government in restructuring the debt, has avoided the other impacts on the Indian sector. Moreover, these two markets has certainly reached the ground.

Closer to the households in the real estate market in Noida are the prices of residential properties are essentially determined by the situation. Lateens area is a chic resort preferred among the upper classes. Residential real estate in this area is selling like hot cakes, but the price is staggering. Given the importance of owning a home in this area, people prefer not to part with their residential assets. It is rare to find a property for sale in this area. As the demand for real estate in this area is high, with limited supply, it is natural for prices to exorbitant. Houses and commercial area Lateens top politicians, bureaucrats and business tycoons with deep pockets. The prices in this area, never a drop due to the upscale neighborhood, the historic significance of the place, well-developed infrastructure and municipal services. Owning a house in the area affected Lateens high status in society.

So we welcome the formation of a bubble in Indian real estate? It is possible, but only in the cities, where prices actually rose on accessibility in the air. It can be argued that this is done almost everywhere in the country, but the fact is that local people are still buying property in an as-needed basis in most Level II and III cities. The supply in most of these cities is limited, more or cut. So when we talk about the possibility of a bubble, you can really only talk about real estate in Mumbai and Delhi now.

During the recovery phase, large amounts of capital sitting on the fence immediately saw an opportunity. This was the first he saw the stock market, and then later in real estate and gold commodity markets – all three classes to revert to a convincing and Mumbai and Delhi in the property market throughout much of a comeback.

It is a place where you will see that all schools and high schools in accordance with international standards modeled. In fact, medical sites, commercial, institutional, residential and entertainment match with international levels and provide a classy look.
Greater Noida offers immense potential, more and more investors to invest their capital in the personal and professional interests of the place to get. You can add, land area, are also very affordable. And knowing that this place may be the next target, it is definitely worth the investment in areas away from residential areas near the highway and the golf course. The plot sizes in the Sigma and Eta-sector, Chi Phi at the Expressway and Swarn Nagri extend from 200-1000 square meters.