Luxury housing trends: Why are real estate developers launching ₹5 crore+ apartments in Noida?

By Bricksnwall | 2024-09-22

Noida real estate market: As the cost of land and development reaches the ceiling, builders lift their game in Uttar Pradesh's most promising township

Noida is quickly losing its reputation as Gurugram's impoverished relative, to the point where the pricing of recent luxury home projects appear to be practically on par with new launches in the Millennium City. People looking to upgrade from 'kothi' living to a 'condo' lifestyle, investors, non-resident Indians, and businesspeople who have made it big in the industrial town are all taking advantage of the city's high-end amenities.

The government's push for business and infrastructural development has further improved the law and order situation in Noida, as well as the overall perception of the city. Gautam Buddh Nagar today houses various IT and consultancy enterprises, not necessarily back-office businesses.

Infrastructure development, particularly the forthcoming Noida International Airport, as well as a large network of highways, railroads, and new metro corridors, are expected to improve connectivity and have an impact on property prices in the years ahead. Buyers are investing in new house complexes in Noida, with most priced above ₹5 crore.

The price of new launches rises in tandem with the cost of land. Since 2022, real estate developers who were previously obligated to pay only a minimum of 10% at the time of land purchase and the remainder over a five to seven-year period must now pay the entire amount within 90 days after allotment. According to real estate developers, this has made land purchases not just pricey, but also rare.

The only choice today is to offer ultra-luxury housing units with a wealth of amenities in order to make the project commercially viable," they stated.

Developers such as Experion, M3M, Godrej, County Group, Gaurs Group, and Max are offering ultra-luxurious apartments, and as real estate prices in Noida have risen, speculators and investors have entered the fray in the hope of profiting, according to local real estate brokers.

The rising cost of land has prompted developers to create luxury projects in Noida.

Established developers in Noida have recently launched projects worth more than ₹5 crore. Land has becoming scarce in Noida.

"The supply of land parcels in Noida has dried up. Furthermore, developers must now pay for the land ahead. Second, the Master Plan specifies that only 19% of the land can be used for residential projects. All of these reasons have resulted in skyrocketing land costs, which have in turn influenced the prices of new launches," said Manoj Gaur, chairman and managing director of Gaurs Group.

Amit Modi, Director of County Group, believes that land has grown expensive and scarce in Noida. It therefore makes economic sense to build large-sized flats and pack them with facilities.

"Noida is no longer the poor cousin of Gurugram. The company's project in Sector 115 provides flats ranging from ₹9 crore to ₹13 crore. Apartment sizes range from 4700 to 7000 square feet, he said.

"Improvement in Noida's profile, coupled with large-scale infrastructure projects, not to mention an increase in leasing of A Grade office spaces, has changed the way an investor looks at Noida today," said Mudassir Zaidi, Executive Director at Knight Frank India. 

Previously, Gurugram accounted for two-thirds of all office leasing, while Noida accounted for one-third. This has evolved over the years, and various corporations now view Noida as a significant market. This has impacted the home market as well. According to him, new projects now provide a lifestyle that was not before available in the metropolis.

Several developers are pursuing the ultra-luxury property market, and consumers are reacting. The cost of land is a crucial consideration, as is the cost of building. The price has increased from ₹4500 per sq ft before Covid to ₹7000 per sq ft today. It consequently makes sense for developers to lift the game and offer a higher end product rather than work with low margins," he said, adding that the city is still working on its image as a poor relative of Gurugram. It is still a work in progress, but a significant gap has already been closed.

"Noida is become a popular choice for both residential and commercial investors. Noida has accelerated its price and luxury project announcements in recent quarters. This city has mostly been an end-user market, with slower price growth than Gurugram. However, the pattern has seen a modest reversal in the previous few quarters with increasing investor interest', said Dhruv Agarwala, Group CEO of Housing.com and Proptiger.com.

Noida International Airport with Property Prices:

The recent increase in demand and pricing in Noida is primarily attributable to significant infrastructure improvements around the city. A crucial component that may be fuelling this expansion is the Jewar airport, which is poised to become a major accelerator for further development and investment in the region," he said.

According to Saurabh Garg, co-founder and chief business officer of NoBroker, Noida and Greater Noida have emerged as hotbeds of luxury real estate development. In these places, there is a surge in demand for uber-premium apartments, which is driven by a number of causes.

Source: Hindustan Times