Authorities in Noida – Greater Noida region one of the biggest housing markets in the National Capital Region may soon execute an exit policy for builders hoping to surrender surplus land, even as Noida Authority decided to increase land allocation rates in the city by 14.19, much to the disappointment of developers struggling to cope with slow sales.
The policy was announced as realtors owe around Rs 25,000 crore in land dues to the authorities. Several developers have failed to deliver projects in Noida and Greater Noida due to financial stress. This has affected nearly one lakh homebuyers In Noida alone who have not got their flats despite paying the full amount.
These developers may have build a stage or two of their approved projects, however given the present economic situations and the tight liquidity situation they are not keen to launch another phase. Several developers have defaulted on their payments for land to the authorities.
The dues to YEIDA, for instance, are over Rs 3,000 crore. If the policy is implemented, builders can get rid of the excess land and utilize the refunded cash to fund fulfillment of their existing projects that have been going moderate.
The authority will return 70 per cent of the deposit after deducting 30 per cent money. With the refund a realtor can complete another project, which is nearing completion. The three authorities will then allot the returned land by a fresh allotment process,” said Arun Vir Singh, chief executive officer (CEO) of YEIDA.
The money will be refunded to the builders at allotment rates. Authorities can then allocate the surrendered land to other builders at current market rates. A similar policy was implemented in Uttar Pradesh in 2010 however was eliminated in 2012.This will help 4.5 lakh homebuyers in Noida and Greater Noida affected by realtors’ failure to complete housing projects.
If new players in Noida and Greater Noida pump in funds to develop undeveloped land, it will bring positivity in the realty sector, thereby helping buyers. Housing projects are stuck because many builders have not been able to sell unsold inventory that helps in raising funds. The proposed policy can bring money, hope and positivity, which will ultimately impact buyers