By: Sunil Dahiya, Managing Director, Vigneshwara Developers
The Noida Extension has snowballed into controversy which could have been better avoided. The fact is that the impasse has made everybody to suffer, be it developer or end user. The raw product, the land, on which the product rests, has gone to the original owner. Now the original owner is again comparing his land to that to Gurgaon’s, as both Noida and Gurgaon have a half an hour drive from Delhi. So he’s thinking what’s the difference between my land and their land? What’s the difference between their compensation and my compensation?
However, such comparison is not rational and it can only lead to a deadlock which will help none of the concerned parties. For instance, today the market rate in Gurgaon is about Rs. 5-7 crore an acre and this belt in Noida has been acquired at about Rs. 7 lakh an acre. Obviously, there is a huge arbitrage. So if every past deal is taken into retrospect and asked to reconcile, I think it is not just practical but the benchmark is also too high. Even if you half it, you still don’t arrive at a consensus.
So, consensus eludes with such a rigid stand. As a result, what will happen is those who come in Rs. 15-30 lakh bracket, will not be able to afford the revised rate which would be double the cost or perhaps triple the cost. So that is for sure that their investments are not going to let them fit in the new scenario because the farmers are not at all going to realize their land anywhere less than their cousins on the other side. That’s the basic situation here.
Now, what is the solution to this? I think to start with, they should go for a tripartite discussion. If all the parties come on the table with reasonable offer and intent to solution, not just extract more out of it, then every solution is possible. But, here I don’t think that the government or the developers are in a position to negotiate with the farmers. That’s where the basic problem lies. So it is a sorry state of affairs right now, but it is a learning process and a learning curve for the real estate industry.
Till now, the telecom industry was hit, the banking industry was hit and now the real estate is taking a hit. Going way forward, I think everyone’s expectations have been corrected. People are now not expecting anything in Delhi-NCR between Rs. 15-30 lakh. So that’s for sure that people’s expectations reached realistic levels and they have come up to the market levels, realizing that whatever dreams they want to have in regards to housing, they cannot be in this bracket at least.
