How Metro Line Can Promote Housing In Noida
If the Noida-Greater Noida extension Metro line becomes functional by March 2017, as is expected, it will have been constructed in a record two-and-a-half years from the date of being commissioned. Besides, the South Delhi-Noida Metro line is also seen getting functional by the end of this year.
A greater Metro connectivity could prove a boon for Noida, part of the National Capital Region (NCR), where economic growth has outpaced infrastructural growth. It will benefit people coming from the capital to work in Noida, as well as the residents of the Noida-Greater Noida region.
In Greater Noida, for example, housing prices have been stagnant, partly because of poor infrastructure. People here are still waiting for good water supply, sewage, and other amenities. A Metro connectivity will, however, change things for the better. Here are a few hindrances that Noida will be able to overcome to a certain degree with Metro connectivity.
- Demand-supply: When real estate investors and home buyers expect the necessary infrastructure to come up, there is usually an oversupply of homes because of rampant speculation. Real estate developers find it difficult to raise money when housing projects are being constructed. The upcoming Metro line will bring a greater stability in the demand-supply situation.
- Leash on speculation: When there is speculation, people buy and sell real estate assets too often. That is costly, wasteful and time consuming. But, when there is proper infrastructure, like Metro lines and water supply, this is less likely to happen.
- Investors prefer real estate: Though it has declined in the recent past, inflation is generally high in India. For much of the country's independent history, prices have risen at a rate much higher than in developed countries. Besides, like in many emerging nations, India's capital markets are not well-developed. So, people are more likely to invest in real estate assets, especially in localities that seem promising, like the NCR towns.
- Move to own homes: When better transportation networks are not there, people are less likely to move into their own homes for reasons that economists call “family rigidities”. Kaivan Munshi and Mark Rosenzweig have recently pointed out that migration to cities is much lower in India because of weak formal insurance. For example, a person with a low income is not likely to move from a village to a city because that will cut him off from informal insurance, such as financial aid from relatives and friends. Something similar is likely to happen in NCR towns when proper infrastructure and Metro lines are not there. For example, Noida is known as a town for retirees. If your child is studying in South Delhi, you are not likely to sell your house and move to your new flat in Noida, especially if infrastructure there is not already well-developed. This is likely for many other reasons, too. For example, imagine a young couple living in Delhi with parents, who provide child care for babies. They are less likely to move to their newly built home in Noida, even if they work there, especially if the infrastructure is not yet up.