By: Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
By what seems like a cruel twist of fate, the grounding of the country’s largest airline coincided with provisional construction approval for India’s largest (by surface area) airport at Jewar in Noida. It may be recalled that the Allahabad court dismissed petitions filed by farmers and gave in-principle approval to commence the construction of Jewar International Airport, which is estimated to be built at a cost of USD 3.1 bn.
Naturally, the expectation is that just like any mega infrastructure project, this greenfield airport will give a major boost to the overall economic activity around Noida and Greater Noida region. Let’s take a closer look.
Economic Impact: Once completed, Jewar International Airport will not only ease traffic at Delhi’s IGI Airport but also create multiple job opportunities and give decent impetus to the property market in Noida, Greater Noida, and Yamuna Expressway. These markets have been reeling under tremendous pressure over the last three to four years, and require a fresh injection of opportunity and intent to overcome this slump.
For an area to become end-user centric and liveable, a massive infrastructure project like Jewar International Airport can definitely make a huge difference. Such projects are invariably followed by more real estate developments including housing, commercial, hospitality, etc.
‘Real’ Benefits – Strictly Long-Term: All this sounds rosy enough, but investors, buyers, and developers would be well-advised not to jump the bandwagon immediately. While a second international airport in NCR will certainly have a major impact on the real estate market in and around the region and the state of UP, the ‘real’ impact will become visible only in around 8-10 years.
Until there are visible signs of construction activity on Jewar International Airport, the potential of other real estate developments such as residential, commercial or retail will remain on hold. To be sure, developers who had hoped to cash in on this mega project when it was announced several years ago bought large land parcels in the vicinity.
However, they will refrain from launching residential or commercial projects in the immediate future, as the nearby areas including Noida, Greater Noida, and Yamuna Expressway still have more than enough existing inventory.
As per ANAROCK data, the total unsold stock in Noida, Greater Noida and Yamuna Expressway collectively stands at 73,680 units as on Q1 2019 – nearly 41% of the total unsold stock in the whole of NCR. ANAROCK data also indicates that out of the total delayed units in NCR (approx. 2,10,200 units) launched in 2013 or before, Greater Noida has the maximum share of nearly 50% units worth close to INR 45,039 Cr.
In retrospect, it is clear that real estate activity in Greater Noida boomed on the back of hype around boosted connectivity to Yamuna Expressway, which passes through this region. Developers cashed on the connectivity hype and launched innumerable projects over the years. Simultaneously, they also launched projects in Greater Noida West – which are now stuck in various stages of non-completion.
Stuck Housing in NCR
Source: ANAROCK Research
Clearly, there is ample unsold or unfinished stock in these markets. Developers will not risk launching new residential projects until the previous stock is cleared or completed. Also, major land bank holders in and around the new airport – one of which is estimated to hold over 2,000-3,000 acres – are yet to find relief in the form of adequate funding.
Fast Forward – Distant Future Trends: Once operational, the Jewar airport will definitely be a game-changer – not just for Noida and Greater Noida markets but also the nearby hinterlands. Some of the major positive trends over the long term would include:
A Final Word of Caution: Buyers will gradually begin to enter the real estate market in and around the Jewar International Airport region. It is imperative that they do a thorough check before buying properties. The areas along the Yamuna Expressway have been marred by multiple land litigations that have severely impacted buyers in the last few years. Before investing in the areas around the upcoming airport, it is important to establish how soon they will actually become inhabitable and liveable.
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