Real estate has proven to be one of the best investments in India in the last decade or so, especially in Metros like Delhi NCR and Mumbai. Due to the scarcity of fresh real estate projects in Delhi, the surrounding areas like Gurgaon, Noida and Faridabad has prospered along with Delhi.
In the last 5 years, prices in Noida have increased substantially, giving very handsome returns to investors - almost 4-5 times the initial investment in some real estate segments like projects on Noida expressway.
In the last 2 years alone, prices of the plots on the Noida expressway like those of Jaypee Group have increased 2.5 times. Two years back, the price of the plot was around Rs 35,000 per square yard and now it is around Rs 85,000 per square yard.
Investments in apartments, though have not given such returns. However, they are still significant compared to stock market or fixed income instruments like fixed deposits. Two years back, the price of the apartment was around Rs 3,000 per square feet and now it is around Rs 4,500 per square feet. The returns may not be in the same league as investment in plot, but it is still very high, especially, since the investors do not need to put the entire amount initially - they usually take 60% to 80% of amount as home loan from a bank.
Now, the important question - Does it still make sense for a new investor to invest in real estate on Noida expressway?
Many analysts think that the centre of Noida is shifting to Noida expressway as most of the companies like Accenture, HCL, Steria etc have moved their offices on Noida expressway. Also, most of the new residential projects by top developers are being planned and constructed on the expressway. Real estate space in Delhi has got either exhausted in most locations or is way too expensive for most companies. IT companies are looking to move in SEZ zones to avail tax benefit which are being planned in Gurgaon and Noida. People still continue to move to Metros as most of the development is happening in big cities. Delhi has got expanded to "Delhi NCR" or Delhi National Capital Region which constitutes Gurgaon, Noida and Faridabad. This trend will continue and more small places will get included in Delhi NCR - the next in line being Manesar and Greater Noida. So, the future of real estate investments on Noida expressway looks great. Even if there is a slowdown and recession as many predict, it is likely to hold the prices of real estate projects on Noida expressway. There is limited downside and very good upside.