On ATS village prices, NOIDA

Bhuwanb, RE cycle is 7-8 years, industrial cycle is 4-5 years.

But yes, alternate cycles deliver much bigger returns. Since 2003-2007 returned abnormal returns, 2015 returns will be more muted and 2023 will see the hydrogen bomb.

That means a holding period of 15 years or more. So if buying a flat, go for quality, because flats have a life and will deteriorate, otherwise buy a plot.

Re. ATS village, maximum price appreciation ocurred between 2003 to 2007, when the big bull run in property wqas on. From what I remember, prices were 1500 psf in 2003, 2500 psf in 2005, 3500 psf in 2006 (and this includes the construction premium) and 6000 psf in 2008. Now it is probably 5500-6000 psf - but there are no deals happening, so cannot judge.

ATS village turned out to be much better than Gurgaon Sohna Road - where prices were 1200 psf in 2003, 1600 psf in 2004, 1900 psf in 2005, 3000 psf in 2006, 4000 psf (plus) in 2007, 3500 psf in 2008, 3000 psf in 2009 and back up to to 5000 psf now, in Vipul Greens, which started around the same time.

Infrastructure, shops etc around Vipul Greens are much better now than around ATS village.

ATS sector 50 is much better actually, than ATS village.

Anyway - all this construction in NOIDA will actually give paradoxical returns to prices of ATS village for the next 20 years - because it will continue to be one of the best locations and societies. The more the area develops, the more the value of ATS village. The more the inflation (currently 15%), more will appreciate ATS village.

I expect prices to now move to 7000 psf and more very soon - when many of the new launches start facing delays in construction. In 2014, I expect it to be 10,000 psf which is south delhi DDA flat rates.

While your points are very valid, and prices of ATS may not rise, I expect otherwise. Because development of RE is very slow - other constructions will stagnate and not get delivered. End users will buy in ATS (no other options) and existing owners will not part with lesser price.So we will have scarcity in the middle of plenty. I have seen it happen in many places. Omaxe coming nearby is no competition, Unitech Grand is much delayed and JP is stagnating without progress.As I said before, when Grand and JP come up, there will be paradoxical elevation of ATS prices, because in premium property, the valuation is based not in supply and demand but on positioning - and ATS will command premium over Grand, JP pavillion and LB espacia.But for that, all the ongoing construction and chaos and dust have to go away. Will take some 5 years. By 2020 ATS village will still be the best in the area and will command great value.

BTW, when investing in flat, go for very small (1BHK or small 2BHK) or very large (>2000 sf). Both command better rent and resale value than usual average sized 2 and 3BHKs.

Price rise in big flats is not always true - prices rise in spurts. It rises only during a sudden jump in prices like what is happening now in Gurgaon/Mumbai/Pune and what happened all over India in 2006-7.

Big flats appreciate a lot during booms but their price drops a lot during a bust.

So you have to exit during a boom time and for many years you will not be able to exit, because price is not attractive. But in the peak of a property boom, big flats outperform smaller 2 and 3BHKs because you can charge a psf premium - since carpet area is much more than for smaller flats. People pay the premium for this.

On the other hand, it commands a better rent than 3BHK even in busts, because the people who rent such flats can afford it and there is a premium for its size.

29.9.2010

Kube is a good price. Main problem will be excruciatingly slow execution.

Having said that (so that thread is not highjacked) I must say few things.

1. Distance in expressway is measured in time from exit. If there is no exit on expressway, Greater NOIDA will be closer to Delhi than both JP NOIDA and Unitech Grande (if both are approached from sector road rather than expressway).

2. Expressway without toll will degenerate to NH24 like chaos - so toll is good and it will and should come.

3. Without expressway exits near 93B, LB is best located followed by Grand for Delhi people. JP not so good.

4. Risks with Unitech have gone now - they have funding, reduced debt and Grand will probably finish before time. This is not 2008-2009 when they had funding problems

5. JP has no funding risk but has huge execution risk - expect extreme delays (>5 years) in all except Pavillion, Imperial, Klassic and Kosmos.

6. Biggest delays expected in Kube :-), followed by Knights court, Kasa and least delay in Kensington.

7. JP has a very poor customer service dept - almost non-existent. Customers will be treated very badly - unlike Unitech. They are overstaffed and yet totally inefficient and near breakdown even with current customer base.

8. JP has been a B2B company - they are failing at B2C level - its not there in their company make up.

9. So your money is equally safe in JP and Unitech currently. As pointed out, JP is less exclusive than Unitech althoughsame psf price. Some people (like me) prefer a more friendly middle class crowd and would prefer JP over Unitech - where you will live and die without ever meeting your rich neighbor.

LB is best for neighbors - all techie crowd. JP has more of non-techie crowd.

I would not wait and watch till Diwali for buying in NOIDA - these prices are here to stay and can only go up from here, seeing how stock and RE markets are behaving.

Looks like there has been massive absorption of the new NOIDA launches - even if not, builders are back to their game of increasing prices every 4 months just as a tactic.