Flying high Are properties near airport really smart investment?

The report of a property consultancy firm about sizeable appreciation of property prices and record demand for plots around upcoming Jewar Airport at Yamuna Expressway in Noida has yet again brought the spotlight back on the value of properties located closer to airports. Such reports tempt an average Indian looking for a property as an investment and someone having an option of buying only one property often falls prey to FOMO (Fear of Missing Out) due to such reports.

It is time to examine whether properties around the airports are really that attractive and value for money?

An average Indian with a limited understanding of property investment more often than not fails to understand the pros & cons of such claims of once-in-a-lifetime investment offering a hefty appreciation.

Ok! It is true that the property rates around airport projects be it the Saheed Bhagat Singh International Airport in Mohali or the upcoming Jewar Airport at Yamuna Expressway in Noida, have witnessed spectacular appreciation over the past few years. As per the report mentioned above, land prices in the Jewar area along the Yamuna Expressway have increased by 40 per cent over the past five years and are expected to further increase by 50 per cent by 2030.

Similarly, prices of plots and flats in the areas in the vicinity of Chandigarh airport have jumped by over 50-60 per cent in the past three years.

Demand spike and ground reality

For some 450 plots on offer in a project along Yamuna Expressway received more than 1 lakh applications. Statistics clearly suggest that property on Yamuna Expressway, in general, and close to Jewar Airport, in particular, are red hot in terms of the demand dynamics. But then statistics are just statistics and conceal more than what they seem to reveal.

Just to say that the property prices have touched Rs 15,000 per sq feet in Noida and the same is at Rs 7,500 per sq feet elsewhere in the city, doesn’t make Yamuna Expressway properties a sought-after choice.

A few pertinent questions that need to be looked at:

• Whether areas around upcoming Jewar airport are worth living as of now?
• Aren’t residential zones around this airport futuristic in terms of livability?
• Are there enough job catchment areas now for an average middle class person to move?
• Is last mile connectivity there for an average middle class person to live?
• Does the area have essential social infrastructure like schools, colleges, hospitals etc for average families to live?

Needless to say, most of these questions have a clear NO as an answer as of now.

But then the obvious question is why are the property prices appreciating so fast over there? More importantly, who is fuelling this price appreciation in the name of proximity to airport.

The fact is that any given location rewards the first-movers and properties around aiports are no different. When the base level is low, the prices are bound to go up with the projected developments and future potential.

It’s also time to remember NAINA (Navi Mumbai Airport Influence Notified Area). In the past 20 years the property prices here have skyrocketed no less than 20 times over there. And still, there is neither an operational airport here nor are the livability conditions conducive here by and large. Those who have travelled to the region are witness to places like Ulwe which stands as a ghost town. And investors are stuck as prospects of property resale are limited after the prices have reached a plateau point.

Thus, it is clear that there are vested interests involved in making these areas look like premium ones. It is the deep pocket investors and property sharks who are smelling blood in the area and are exploiting the weakness of a gullible homebuyer.

To buy or not to buy!

But where does a homeseeker or investor stand in such a scenario? Should you buy a property in such an area or not? Here are some points to ponder:

n Who are you as a buyer?

n What is your financial standing and investment outlook?

If you are an investor (even if a retail investor with surplus money to invest in 2-3 properties) then Yamuna Expressway areas are for you to bet on.

But if you are borrowing 80 per cent of the cost of a house and using 20 per cent of margin money from your savings to buy your first, and most likely only house, then this definitely not the area for you. as you neither have livable conditions nor jobs available closer to your dream home. And travelling everyday from there to your place of work would be a nightmare.

The writer is CEO, Track2Media

How practical

• It is not just about the logistics part of living closer to a new airport. The broader discussion is not limited with timing of investment. Beyond the issue of overpriced properties around the airports, lies the day-to-day hassle of noise pollution, poor air quality, traffic congestion, security protocols and safety issues in case of emergencies.
• The issue has not been debated in India, but in many developed countries there have been studies that living closer to airports have adverse effects on the health, including mental health, due to disrupted sleep patterns.

  n The amount of pollutants produced by aircraft can easily be embedded on the lungs and the bloodstream which can contribute to the development of heart disease.

• In one report, researchers found the risk was the greatest in the population exposed to the highest levels of noise. In another study, animals exposed to aircraft noise experienced increased blood pressure, endothelial dysfunction, and other cardiovascular outcomes that weren’t observed in a control group exposed to noise.
• Research has shown that heavy airplane traffic can pollute the air up to 10 miles (16 km) away.
• A 2019 University of Washington study of the Seattle-Tacoma International Airport shows that homes within 10 miles of the airport are exposed to “ultra-ultrafine” pollution particles that are specific to airline emissions. Previous studies have shown that smaller pollution particles are more likely to be inhaled or absorbed by the body.
• It is hence no surprise that in the US, a majority of people do not prefer living next to an airport due to the noise from airplanes, and to a lesser extent, the traffic generated by the airport.
• So all things being equal, housing prices around airports are are usually less. But in India the trend seems to be completely opposite.
• Last, but not the least, one should be conscious to not get duped by the sweeping promises of big-ticket projects like Formula 1, Film City or Night Safari. How many of average home buyers are going to avail of those amenities. Even if one is a holiday freak and can afford, such amenities lose their charm pretty soon.