Noida’s real estate inventory is mainly dominated by residential plots and apartments. While plots provide better resale value, apartments offer a chance to earn immediate rentals. We dig deeper to help you make an informed investment decision.
The real estate landscape in Noida offers a variety of options to investors, such as studio and multi-configuration apartments, independent builder floors and villas, and residential land. However, when it comes to investment in Noida most people find it difficult to choose between residential land and apartments. As the name suggests, an apartment is a constructed project by a developer. The buyer receives the finished product with minimal effort. A residential plot, on the contrary, is a leasehold land issued by a government authority. The responsibility of further construction lies with the buyer.
Residential plot
The rapid infrastructural development in Noida has given birth to expressways like the Noida-Greater Noida Expressway and flyovers like the Delhi-Noida-Delhi (DND) flyover. The areas connected to these structures have mushroomed into potential residential neighborhoods, courtesy of brilliant connectivity. However, the pertinent question remains is what to buy- residential land or apartments.
Investors prefer residential land over apartments because it appreciates faster and the selling period is much shorter. In Noida, there is a surplus of apartments, most of which follow the same architectural plan. This leaves the buyers confused and frustrated. Plots, on the other hand give them the freedom of planning and customising their property as per preference. The pandemic has made people conscious of hygiene and surroundings. With lesser space between flats and common areas being used by all, buyers are inclined towards plots to avoid infection. Developing sectors like Sectors 71, 72, 92, 105, 108, 122 and 146 have seen increased popularity in Noida from plot investors. Jewar, Sorkha and Sector 150 have also been garnering huge traction owing to their strategic positioning near Noida-Greater Noida Expressway, upcoming international airport and the Blue Line Metro corridor.
Nearly 70 percent of investors in Noida prefer land; however, due to lack of options, majority of people end up buying apartments. Most of the plots available in Noida are authority plots, part of a gated community with boundary walls and Vastu compliance. Also, these plots have adequate civic facilities in place, such as sewage pipelines, street lights, water supply and electricity cables.
However, there are some issues related to plot investments. In Noida, apartments measuring around 1,200 sq ft are available at Rs 60-80 lakh, while plots measuring 112 meters or 1,200 sq ft begin at around Rs 1.2-1.5 crore. Land rates in many parts in Noida have gone North post the announcement of a Film City and the fast-paced development of Jewar International Airport. Additionally, the Loan-to-Value (LTV) ratio offered by banks and Non-Banking Financial Companies (NBFCs) on plots is only 60-70 percent of the property value as opposed to up to 90 percent on home loans. Lastly, construction on plots may get affected by external factors like lack of labour, security and encroachment concerns.
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Residential plot vs Apartment: What should you prefer? |
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Plots |
Apartments |
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Easy possession |
Possession as per project completion |
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Higher and faster appreciation |
Slower appreciation |
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Less tax benefits |
More tax benefits |
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Delayed rental income |
Instant rental income |
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Cumbersome loan approval |
Easier loan approval |
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Encroachment issue |
Security is intact |
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More capital needed |
Relatively lower cost |
Apartment
Apartments in Noida come in different configurations, with 2 BHKs and 3 BHKs being most popular. The readily available home loans, additional tax deductions on the interest paid and long-term capital gains on second home investments, make apartments a more pragmatic choice. Apartments are suitable for investors who wish to earn immediate rental income and seek beyond basic amenities like clubhouse and swimming pool. However, many housing projects have faced delays owing to liquidity issues which weathered buyers’ sentiment in Noida. Over the last 10 years, developers have had difficulty in sticking to their specified timelines. Also, until a Residents’ Welfare Association (RWA) is formed within a housing society, builders are responsible to maintain the project and the excessively high maintenance charges discourage homebuyers from investing.
Noida is often touted as investors’ paradise because of its access to commercial hubs and established social and retail infrastructure. The city offers varied options; hence, investors willing to earn immediate rental income may opt for constructed developments, particularly ready homes to avoid delayed possession; while those who have a longer waiting period may consider land as they are easy to resell and assure higher capital returns.
Source: 99acres, Mar 30, 2023