By what seems like a cruel twist of fate, the grounding of the countryÂs largest airline coincided with provisional construction approval for IndiaÂs largest (by surface area) airport at Jewar in Noida. It may be recalled that the Allahabad court dismissed petitions filed by farmers and gave in-principle approval to commence the construction of Jewar International Airport, which is estimated to be built at a cost of USD 3.1 bn.

Naturally, the expectation is that just like any mega infrastructure project, this greenfield airport will give a major boost to the overall economic activity around Noida and Greater Noida region. Let’s take a closer look.

Economic Impact

Once completed, Jewar International Airport will not only ease traffic at Delhi’s IGI Airport but also create multiple job opportunities and give decent impetus to the property market in Noida, Greater Noida and Yamuna Expressway. These markets have been reeling under tremendous pressure over the last three to four years, and require a fresh injection of opportunity and intent to overcome this slump. 

For an area to become end-user centric and liveable, a massive infrastructure project like Jewar International Airport can definitely make a huge difference. Such projects are invariably followed by more real estate developments including housing, commercial, hospitality, etc.

ÂReal Benefits – Strictly Long-Term

All this sounds rosy enough, but investors, buyers and developers would be well-advised not to jump the bandwagon immediately. While a second international airport in NCR will certainly have a major impact on the real estate market in and around the region and the state of UP, the Âreal impact will become visible only in around 8-10 years.

Until there are visible signs of construction activity on Jewar International Airport, the potential of other real estate developments such as residential, commercial or retail will remain on hold. To be sure, developers who had hoped to cash in on this mega project when it was announced several years ago bought large land parcels in the vicinity.

However, they will refrain from launching residential or commercial projects in the immediate future, as the nearby areas including Noida, Greater Noida and Yamuna Expressway still have more than enough existing inventory.

As per ANAROCK data, the total unsold stock in Noida, Greater Noida and Yamuna Expressway collectively stands at 73,680 units as on Q1 2019 – nearly 41% of the total unsold stock in the whole of NCR. ANAROCK data also indicates that out of the total delayed units in NCR (approx. 2,10,200 units) launched in 2013 or before, Greater Noida has the maximum share of nearly 50% units worth close to INR 45,039 Cr.

In retrospect, it is clear that real estate activity in Greater Noida boomed on the back of hype around boosted connectivity to Yamuna Expressway, which passes through this region. Developers cashed on the connectivity hype and launched innumerable projects over the years. Simultaneously, they also launched projects in Greater Noida West – which are now stuck in various stages of non-completion.

Stuck Housing in NCR

City	Total Units Delayed (launched before or during 2013)	Approx. INR value (In Cr) of Delayed Units
Bhiwadi	5,477	1,415
Delhi	4,102	9,930
Faridabad	3,612	1,815
Ghaziabad	24,728	9,664
Greater Noida	1,04,912	45,039
Gurgaon	23,287	25,086
Noida	44,082	38,511
Grand Total	2,10,200	1,31,460

Source: ANAROCK Research

Clearly, there is ample unsold or unfinished stock in these markets. Developers will not risk launching new residential projects until the previous stock is cleared or completed. Also, major land bank holders in and around the new airport – one of which is estimated to hold over 2,000-3,000 acres  are yet to find relief in the form of adequate funding.

Fast Forward – Distant Future Trends

Once operational, the Jewar airport will definitely be a game-changer – not just for Noida and Greater Noida markets but also the nearby hinterlands. Some of the major positive trends over the long term would include:

• Healthy end-users demand: Despite being more affordable than Gurgaon and Delhi, Greater Noida and the areas along Yamuna Expressway did not become end-user driven markets due to lacklustre infrastructure. The new airport will boost the regionÂs overall infrastructure and make it more liveable and active. As a result, more and more end-users will drive the property market in this region.

• Greater Noida & Yamuna Expressway  new affordable options for first-time home buyers: With increased connectivity and several infrastructure upgrades on the anvil, these two regions will see major realty developments in the times to come. The new airport will be a booster shot. These regions are more affordable than Gurgaon or Delhi, where prices sometimes skyrocket into peaks of unaffordability. First-time homebuyers are apt to focus on these areas – unlike before when investors drove these markets.

• Commercial activity to gain momentum: The new airport will not only increase housing demand but also lead to an uptick in commercial developments like office spaces and retail. In fact, office spaces which will eventually and inevitably proliferate along the region as rentals will be relatively cheaper than in Gurgaon and Delhi, without compromising on the purchasing power of the consumers they cater to.

• Steady long-term capital appreciation: Both Greater Noida and Yamuna Expressway have seen high investor activity in the past few years. While these areas always looked promising for end-users, liveability was a challenge. As a result, several housing projects along the Expressway remained unoccupied and gained the unenviable moniker of Âghost townsÂ. With the new airport coming in, this market will attract more end-users and see steady, genuine capital appreciation rather than mere speculation.

• Boost to tourism in Mathura and Agra: The new airport will further boost tourism in cities like Mathura and Agra. These cities are already well-connected with the National Capital via the Yamuna Expressway. However, the new airport will further increase tourist footfalls. All this will eventually impact the real estate market positively. In the long-term, the airport will also act as a catalyst for Western UPÂs real estate market.

A Final Word of Caution

Buyers will gradually begin to enter the real estate market in and around the Jewar International Airport region. It is imperative that they do a thorough check before buying properties. The areas along the Yamuna Expressway have been marred by multiple land litigations that have severely impacted buyers in the last few years. Before investing in the areas around the upcoming airport, it is important to establish how soon they will actually become inhabitable and liveable.

Author is Santhosh Kumar, VP, Anarock Property Consultant. Views expressed are personal.