Bottom Line: Jewar airport may not impact the property market of Noida, Greater Noida and Yamuna Expressway in the short to medium term. Ravi Sinha explains the reasons.
The euphoria in the Delhi-NCR in general and Noida, Greater Noida & Yamuna Expressway in particular with the clearance of Jewar airport only reminds me the legendary French play ‘Waiting for Godot’. In this play by Samuel Beckett, the two characters, Vladimir and Estragon, wait for the arrival of someone named Godot who never arrives, and while waiting they engage in a variety of discussions and encounter three other characters.
Property boom along Jewar airport seems like the same Godot where the two characters who are waiting and floating variety of discussions are government authorities and the builders. The three characters who are being encountered are the homebuyers, investors and the media.
Ever since the Jewar airport has been given in-principle clearance there has been the last ditch attempt by the developers of subdued property market of Noida and even Ghaziabad to make the best of it. They have suddenly started firing all cylinders with marketing overdrives. It seems the airport is the marketing mantra of survival amidst a prolong spell of slowdown and sales drought.
This raises a very fundamental question: can a domestic airport change the dynamics of property market in and around the radius of say 100 kms? The answer to this question is both yes and no. An airport has no doubt the potential to transform the urban landscape of the region. But only an airport can change the economy of the region would be a misplaced presumption. Jewar airport is no exception to this conventional wisdom of urbanization.
The developers, of course, have their own reasons to hail the announcement of Jewar airport. After all, they have invested in the Noida, Ghaziabad, Greater Noida and Yamuna Expressway region and are today left with no other option but to keep waiting for the Godot. Market conditions are as much responsible for the downside of the property market as the greed of the builders to kill the golden goose with the cheap availability of land parcels in the region.
A closer look at the feasibility and reality of the airport nevertheless suggests it will have little or no impact in the short to medium term outlook. The long term outlook of say 15 to 20 years make any property market attractive proposition and the areas connecting to Jewar are no exception. But with the average age of homebuyers today being 40 years and above, such an outlook is not a comforting factor to invest in the region.
Why Jewar airport won’t be game changer?
Supply far exceeding the demand across Noida, Greater Noida and Yamuna Expressway
More housing supply in the pipeline with Delhi Land Pooling Policy with Delhi address and closer to Indira Gandhi International Airport
Five year time frame for the 1st phase of Jewar airport unrealistic
Acquisition of 3000 hectare of land with 40 odd villages is a tricky affair
Failure of Jaypee Group with Yamuna Expressway makes bidders apprehensive with project feasibility evaluation
First and foremost why Jewar will not attract property premium is the time frame of five years for the phase 1 completion of the airport. This fast paced execution is pretty unrealistic. There has been no land acquisition for the airport and the authorities have only notified the area for the same. Acquisition of 3000 hectare of land that falls into 40 odd villages is a tricky affair.
Land acquisition has always been a messy affair in this part of the world and often it lands in legal dispute that takes years to settle. It took 20 years for the Navi Mumbai airport to start the process and to expect the first phase of the airport to be operational in five years is a far fetched idea. Dwarka Expressway in the Delhi NCR region is another case in point where protest with land acquisition snowballs into legal hurdles and drags for years.
Secondly, it is yet to be seen how many bidders would come forward for this Public Private Partnership (PPP) model. The failure of Jaypee Group with Yamuna Expressway that proved to be the catalytic point of their market collapse is something that will be high on the minds of prospective bidders. These bidders will anyway commission their own feasibility study than relying on the government projection of traffic before making a bid.
The economy of the region anyway poses a big question mark over the immediate success of the airport. With no major business and economy and the multinationals reluctant to set up their bases in this part of the world, it is to be seen how long it will take before this airport inspires confidence. There are many other logistical as well as law & order issues that need to be tackled simultaneously in order to make the region an investment haven.
Thirdly, the demand and supply dynamics of the property market clearly suggests there is supply overhang. The region is today sitting over no less than four to five years of inventory and hence any appreciation due to the upcoming airport is practically ruled out.
Add to it, the Delhi Land Pooling policy throws open more than 55000 hectares of land. Therefore, there will be sizeable inventory and would address the concerns of mass housing at almost the competitive prices. Then the locations of Najafgarh, Narela and Bawana have proper Delhi address (instead of Uttar Pradesh) and will have equally good connectivity, if not better, with the already functional Indira Gandhi International Airport.
Jewar airport has only given some respite to the builders who had run short of ideas to market their project. How long will they be able to sell it with ‘Jewar as the only attraction quotient’ is still debatable. In the short to medium term perspective, the economic rationale and property demand & supply, added with the macro-economic outlook of the region, hardly promises to make Jewar airport a catalyst of price appreciation.
