From ET Realty
These days, developers are coming up with projects that are hard to resist. So, while buying a property, especially in the Delhi-NCR region, one has to be cautious about the location of the property. BI India lists down a few ‘risk-prone’ zones of Delhi NCR property market that one should be careful about before investing in projects there.
“Various issues like delays in delivery, oversupply, speculation and infrastructure deficit have been plaguing these markets, rendering them unsuitable for first-time home purchase,” said Santhosh Kumar, CEO, Operations & International Director, JLL India.
This location comes in the list because of issues such as litigated land parcels, delayed delivery issues and a high incidence of broken promises by developers. “Although property prices here were always affordable, this market has seen the lowest appreciation in entire NCR. Everything that can possibly go wrong in a buyer-developer relationship has done just that in this area of NCR,” said Kumar.
He also noted that the infrastructure development has not been in sync with the residential growth in this region. “Neither the improved connectivity to Delhi via the national highway nor the under-construction metro or new highway to Gurgaon have changed the realty fortunes of this corridor,” he added.
It should be noted that Greater Faridabad has witnessed delayed deliveries by small-developers as well as by a few established builders. Kumar also said that there have been cases of developers running away with home buyers’ money after selling under-constructed flats to innocent buyers.
“On other cases, buyers have been allotted / shown plots on a map or in a particular location but getting physical possession of plots altogether different from the ones initially agreed upon. In a variant of this scam, buyers were not allotted any plots at all or were saddled with plots not included in any master plan, and bereft of the authorities’ approvals,” pointed out Kumar.
“The primary issue impacting this location’s viability as an investment destination is the oversupply of residential units. With 1.5-2 lakh units slated to hit this market, prices are unlikely to appreciate much. Many land acquisition issues involving local farmers have sullied the market here over the last few years. The ensuing delays and litigations, resulting higher compensation being paid to farmers for their land, has also decreased overall affordability,” he said.
Also, this place is expected to be susceptible to earthquakes, considering high-intensity tremors were felt in NCR. “Rampant construction is also observed in neighbouring Noida. As both these areas are situated on the Yamuna river belt, they have more river soil than areas like Gurgaon. With increased seismic activity, it is important for buyers to additionally check if zoning and structural laws are being properly followed here and if the project is earthquake-resistant,” noted Arvind Jain, managing director of Pride Group.
The NH-24 stretch in Ghaziabad
Although Ghaziabad has several launches lined up and good options in affordable housing and township projects are available, price appreciation will largely be driven by its future industrial growth. Also, its viability as a residential destination will depend significantly on infrastructure deployment.
A six-lane expressway has been proposed, but that can easily take more than five years to be built. Currently, there is a major bottleneck for traffic at Indirapuram, and residents commuting here will have to face daily traffic congestion. End-users should only consider moving here if commuting under such conditions is acceptable, and investors should factor in a protracted investment horizon for any appreciable payoff.
A general advisory for end-users and investors interested in this area. Kumar issues advisory for home buyers, who want to buy a property in this region. “Check the status of construction in the identified project, as delays in delivery are commonplace – and it is not only smaller, anonymous developers who are involved. Also, keep away from pre-launches. Instead, look for bargain buys when investors exit. At that point of time, construction will be closer to completion or completed, and Gurgaon is witnessing distress sales from investors,” suggested Kumar.
He added, “Several subvention schemes popular these days actually require payment of more money upfront, and the prices per square feet are also higher if one opts for these. The agreements tend to be restrictive, and there is risk of getting stuck with one developer and project. The interest rates as also the terms and conditions of the developer’s chosen bank must be agreed upon.”