Prime Minister Narendra Modi this weekend inaugurated the Delhi-Meerut Expressway, which is expected to bring down the commute time between National Capital and Meerut to 45 minutes. He also launched the Eastern Peripheral Expressway, India’s first smart and green highway. The big question here is whether widening this stretch right up to Meerut will have an impact on residential prices and if home buyers waiting on the fence should invest now?
Real estate experts are of the opinion that the 9 km stretch that has been launched as part of the first phase passes through stretches that consist of real estate markets that are already exhausted. These include Mayur Vihar, Partparganj and to some extent, Indirapuram. It’s very unlikely that prices in these areas will increase as land is scarce and new projects or for that matter redevelopment is a rare possibility for many years to come.
More choices for homebuyers; prices likely to remain muted
Once the stretch gets completed, there will be more choices available to homebuyers at short distances. Boundaries are expected to shrink. Also, while immediate touch points along the expressway may not open up too many opportunities, the farthest points such as Dasna and Meerut may witness single digit appreciation as these areas are yet to realise their full potential. Overall, impact on prices is likely to remain muted due to reduced demand, cautious buyers and oversupply.
“While Mayur Vihar, Patparganj and even Indirapuram are saturated real estate markets and may not see much traction, real estate markets such as Siddharth Vihar, Crossing Republik and townships located along the way may see around a 5 per cent rise in prices after there is work visible on ground. Prices may stabilise going forward as more choices will be available along the entire stretch and that too for value-for-money residential units. Markets such as Patparganj may see a rise in rentals but that is only after the Metro becomes operational in the area.
IN PICS | Eastern Peripheral Expressway: A look at the 135-km road that could reduce Delhi’s traffic & pollution woes
“With connectivity improving, what will dictate buyers’ decision is why should they pay a premium when within five minutes driving time new units are available for almost half the price. Buyers will have a choice ranging from Rs 11000 per sq ft to as little as Rs 2500 per sq ft,” said Anckur Srivasttava of GenReal Advisers.
Farthest areas to benefit the most
Agrees R K Arora, CMD, Supertech Group. “Widening of the Meerut expressway is expected to impact demand for projects located along the way. But it is the farthest point such as Meerut that will benefit the most as land prices there are still within reach. Residential units too are affordable. A 2BHK can easily be bought for Rs 25 lakh. As widening work progresses, those wanting to shift to new markets such as Greater Noida West, may decide to do so once it is complete as travel time will come down considerably.”
Also, as the real estate market is relatively slow and there is an oversupply situation that exists, prices will be under check for the next four to five years. Brokers in the area also point to the ‘white deal phenomenon’ post demonetisation as the main reason for the muted market conditions. Besides, home buyers are extremely cautious.
As per Knight Frank India estimates, the total unsold inventory in Ghaziabad alone is 27,344 and 62,952 in Greater Noida.
Having said that, if more organized/branded developers were to launch a project or two along the stretch, prices may pick up. Also, state development authorities need to get their act together by launching new schemes as widening work progresses, say experts.
Sentiment may improve once widening nears completion
Some experts are of the opinion that the market in these areas may improve once the widening project nears completion. “Buyers tend to take a decision once infrastructure is closer to completion. At the moment, there is a single positive factor which is infrastructure widening compared to multiple negative factors that are pulling down demand – buyers are cautious, there is trust deficit, there are issues relating to builders’ credibility etc. This is one more option getting added to their kitty but decisions are slower in a bearish market. Unless volumes and sales increase, prices will not rise. Also, developers too will think twice before increasing prices. That will kill demand and also reduce their cash flows, says Mudassir Zaidi, executive director – North, Knight Frank India
Things buyers should keep in mind before investing
Always check the developers’ track record. Do not succumb to marketing gimmicks. Read the fine print carefully. Also, there is no rush to close transactions as there are dime a dozen opportunities available.
Buyers should also understand that highways and expressways that lead to improved connectivity offer more choices to those who are budget conscious. As a matter of fact, road infrastructure is closely linked to residential price movements. When connectivity improves across a wider geography, prices in established markets get restricted to moderate levels and increase affordability of projects located in upcoming markets.
Will widening of the expressway help reduce overhang in real estate inventory?
There will be some impact on sales but it will take time because of prevailing market conditions.
Noida Expressway versus NH24 widening
In case of Noida Expressway, new areas became accessible. It opened up possibilities of fresh development. In case of NH24 or the Meerut Expressway, widening will only ease accessibility. Areas located along this Expressway are all established and the impact therefore will be more muted.
As for the 135-km Eastern Peripheral Expressway, there are many possibilities that may open up for warehousing.
The Delhi-Meerut Expressway will cut travel time between Delhi and Meerut to 45 minutes from two-and-half hour now. Here are a few of its features:
- This is the first bridge in the country that have vertical gardens with solar power system and drip irrigation. Beautiful lighting system has also been developed on the major structures.
- The first phase of the Delhi-Meerut Expressway cost Rs 842 crore on building the 9-km stretch of 14-lane highway. The total cost of the project on completion would be Rs 7,500 crore.
- The total length of the project is 82 km, of which the first 27.74 kms will be 14-laned, while the rest will be a six-lane expressway.
- The stretch between Delhi border to Dasna (19 km) is likely to be completed by May 2019
- Dasna to Hapur stretch (22 km) is expected to be completed by August 2018 and bids have been invited for the remaining Hapur to Meerut stretch (31 km)
- The 135-km Eastern Peripheral Expressway, built at a cost of Rs 11,000 crore, has several unique features and is India’s first highway to be lit by solar power besides provisions of rain water harvesting on every 500 metres on both sides and would showcase 36 national monuments and 40 fountains, the minister said, adding it has been completed in a record 500 days.