New Delhi: Property consultant JLL India has advised home buyers to avoid certain locations, including Noida Extension, in Delhi-NCR real estate market due to delays in projects delivery, oversupply, speculation and lack of infrastructure.
JLL India has declared Noida Extension, Greater Faridabad and Delhi's L & J zones as 'high-caution' areas.
"The National Capital Region (NCR) has some locations that buyers are best advised to avoid. Various issues like delays in delivery, oversupply, speculation and infrastructure deficit have been plaguing these markets, rendering them unsuitable for first-time home purchase," JLL India CEO - Operations & International Director Santhosh Kumar said.
On Noida Extension, which is part of Greater Noida, Kumar said the primary issue impacting this location's viability as an investment destination is the oversupply of housing units.
"With 1.5-2 lakh units slated to hit this market, prices are unlikely to appreciate much. Many land acquisition issues involving local farmers have sullied the market here over the last few years. The ensuing delays and litigations, resulting higher compensation being paid to farmers for their land, has also decreased overall affordability," he said.
The government's decision to compensate developers for their losses by allotting them higher floor area ratio (FAR) would result in far greater development congestion than was originally envisaged for this area, Kumar said, adding that delays in completion of projects being another concern.
"Despite its disproportionate housing supply, Noida Extension has lost much of its earlier attractiveness," he said.
JLL said that congestion will turn this area into an uninspiring concrete jungle even though metro and a wide road connecting Noida Extension to Noida are on anvil.
On Greater Faridabad, Kumar said the location has become notorious for litigated land parcels, delayed delivery issues and a high incidence of broken promises by developers.
"The poor track record throws up cause for high caution for end-users - for all and any faith put in location and the developers active here, caveat emptor ('let the buyers beware') applies. As far as investors are concerned, this area has fallen off their radar," Kumar said.
About Delhi?s L & J zones, the consultant said that with the new land pooling policy in place, peripheral areas like Delhi?s L & J Zone have become highly speculative markets.
"Retail buyers should stay away from these and certainly not fall for land pooling options or related schemes. These locations are mainly lucrative for investors or those interested in having their own farmhouses," Kumar said.
JLL further said that home buyers and investors need to be cautious and do proper due diligence when considering options at the NH-24 stretch in Ghaziabad and Gurgaon.
On Gurgaon, it asked the buyers and investors to check the status of construction in the identified project, as delays in delivery are commonplace.
"Keep away from pre-launches. Instead, look for bargain buys when investors exit. At that point of time, construction will be closer to completion or completed, and Gurgaon is witnessing distress sales from investors," Kumar said.
Gurgaon market is already over-priced, pace of infrastructure development is slow and the incentive for quick appreciation has disappeared, the consultant said, adding that a longer investment horizon will have to be considered.
About Ghaziabad, JLL said the price appreciation will largely be driven by city's future industrial growth.