Breather for buyers, boost for market

Tribune news service

The prolonged slowdown effect in the realty sector may have dimmed the hopes of a cheerful festive season in 2015, but for over 55,000 buyers in Noida it was  nothing less than festival time with the government putting a stamp on reducing the area of Eco Sensitive Zone around Okhla Bird Sanctuary this week. 

The matter had given sleepless nights to thousands of homebuyers as well as builders who had real estate stakes in the area ever since the National Green Tribunal (NGT) demarcated a 10-km ESZ around the sanctuary in 2013. The order had jeopardised the fate of almost 53 residential projects besides commercial projects and Malls being developed by over 40 developers as it prohibited all construction activity in the 10 km radius of the sanctuary till clearance was accorded by the National Board For Wildlife (NBWL). 

This had further dampened the market sentiments in Noida as prospective buyers grew vary. Earlier experience in Noida Extension where land acquisition had been quashed and the Okhla santuary issue made a considerable dent in the sale volume in this part of NCR.

Samir Jasuja, CEO and Founder- PropEquity said, “Many buyers have paid close to the entire amount for their homes in these locations, but in the light of the NGT orders, they were clueless about  moving  into their new homes or even selling off their apartments. A few years ago, Noida Extension had seen farmers protesting against land acquisition in the area, which had led to all construction activity coming to a halt in 2011. The final order on the land acquisition is pending with the Supreme Court. All such cases have been affecting market sentiment negatively”. Buyers in NCR are unsure about getting early relief, since developers stop work as soon as any new court ruling comes in and is fully understood by them. Court cases, on the other hand, tend to drag for very long in the Indian judiciary system. “End users not only have to shoulder the burden of paying EMIs but also their ongoing monthly rentals, while simultaneously remaining unsure of when they will start getting returns on their capital values”, adds Jasuja. 

Housing projects of various developers, including Jaypee Green, DLF, ATS, 3C Developers and Supertech, were affected due to the NGT order. According to market watchers the buyers and builders had suffered a loss of approximately Rs 2500 crore during this period as projects got stalled. 

Thus, the relief was palpable when earlier this week the Environment Ministry  approved the draft notice  allowing construction outside 100 meters on the eastern, western and southern sides of the Okhla Bird Sanctuary and 1.27 km on its Northern side. “It’s a very good news for 55,000 buyers whose homes were ready but they could not occupy it,” CREDAI President Getamber Anand said about the decision.

DLF Group Executive Director Rajeev Talwar said: “Extremely positive step taken by the government. A little delayed but will provide huge relief to homebuyers whose flats were ready more than a year back but were unable to occupy them”.

“The decision will give respite to customers as well as the developers, who have been stuck in a limbo for long due to halt in all construction activity within the 10 km radius of the bird sanctuary. In addition to this, the move will also enable fast track completion of commercial projects thereby boosting economic activity in the area. This is a positive move which will improve investors sentiments and customers will not be held up due to lengthy litigations”, said Navin Raheja,Chairman NAREDCO.

The move will also opendoors for employment opportunities and economic turnover when the commercial and retail establishments get occupation certificates. “The location will also see more housing sales along with office occupier and retail space leasing in forthcoming months”, said CBRE South Asia CMD Anshuman Magazine .

“For DLF, it means opening up of the Mall of India, which is being developed in Noida, as soon as possible providing relief to hundreds of shopping and food outlets,” Talwar said.

The decision is likely to pump in an estimated Rs 2000 crore  in the eschequer as stamp duty through the registration of the properties handed over to buyers now.  The decision will also help in releasing several thousand square feet of building area in future.

“This news has come out as a much needed breather especially for those home buyers who were staying on rent and their apartments were ready for possession. The dampening of the Noida region as a property hub for almost two years will see an end as potential home buyers and investors will invest again, that is sure to bring about steady capital appreciation in the regions that were affected by the previous NGT order which will also pave way for future property demand in the regions", said KushagrAnsal, Director, Ansal Housing.

The ministry will issue a final notification within a week in this regard which will  allow  homebuyers outside the ESZ to get occupancy certificates of their flats, which had been pending since the October 2013 NGT order.