NEW DELHI: Authorities in Noida-Greater Noidaregion — one of the biggest housing markets in the National Capital Region — may soon implement an exit policy for builders looking to surrender surplus land, even as Noida Authoritydecided to increase land allocation rates in the city.
Authorities of Noida, Greater Noida and Yamuna Expressway will soon firm up a proposal on this and send it to the Uttar Pradesh government for approval, said Arun Vir Singh, CEO of Yamuna Expressway Industrial Development Authority (YEIDA).
“Many developers had been asking for an exit policy because of slow sales,” he told ET.
These developers may have built a phase or two of their approved projects, but given the current market conditions and the tight liquidity situation they are not keen to launch another phase, officials said. Several developers have defaulted on their payments for land to the authorities.
The dues to YEIDA, for instance, are over Rs 3,000 crore. If the policy is implemented, builders can get rid of excess land and use the refunded money to finance completion of their existing projects that have been going slow.
Singh said the money will be refunded to the builders at allotment rates. Authorities can then allot the surrendered land to other builders at current market rates. A similar policy was implemented in Uttar Pradesh in 2010 but was phased out in 2012.
The development comes even as the Noida Authority on Thursday decided to increase land allotment rates for residential projects in the city by 14.19%, much to the disappointment of developers struggling to cope with slow sales.
Confederation of Real Estate Developers‘ Associations of India (CREDAI) has sent a letter to the authority saying this is not the right time to increase land rates. “Haryana is thinking of reducing rates, West Bengal has reduced rates and other states too are considering a rate cut.
The Noida Authority too should consider market realities and reduce rates,” said Getamber Anand, national president of CREDAI. Manoj Gaur, MD of Noida-based builder Gaursons, said the Noida Authority should reduce price of land by at least 25% rather than increasing it.
A senior official at Noida Authority said it has been spending massively on infrastructure projects like the metro, elevated roads and bridges, and had to hike land prices to make up for this.