House prices across the National Capital Region (NCR) are likely to fall by 15-20 per cent over the next couple of years, after the government on Tuesday cleared the decks for land pooling in the outskirts of Delhi.
According to experts, property prices will come down once there is a steady supply in the Delhi market, which could happen in the next three to four years.
“Prices have zoomed since the notification of a land pooling policy by the Delhi Development Authority (DDA) in 2013.
Now, after finalisation of the policy, prices in south and central Delhi and parts of Gurgaon and Noida will correct at least by 15-20 per cent,” a source said.
The real estate sector has been hit by declining sales because of low demand and high prices.
Though sentiment has turned positive over the past few months, there has been no movement on the ground.
Experts are of the view that demand will only rise if prices correct to realistic levels.
According to the Delhi Master Plan-2021, the DDA will undertake urbanisation of about 20,000 hectares of land in association with the private sector.
The development in the outskirts of Delhi will bring in 1.4-1.6 million dwelling units.
DDA has been unable to acquire land over the past 10 years, which has forced a hybrid pooling policy under the Delhi Master Plan 2021.
The population of Delhi is around 17 million and is expected to reach 23 million by 2021. The master plan seeks to build houses for all Delhiites.
“Pooling will help make more land available for housing, which will bring down the exorbitant prices prevailing in Delhi. It will also provide land for affordable and low-budget housing. Since most of the land coming under this policy is in remote areas, the results of the policy cannot be expected to be visible in the short term,” said Supertech Chairman and Managing Director RK Arora.
In the policy notified in September 2013, owners can pool land for development by the DDA. Instead of compensation, owners will get 48-60 per cent land back, after the authority has built the infrastructure.
DDA has two categories for land pooling, above 20 hectares and between 2 to 20 hectares. The ground coverage has also been increased from 33 per cent to 40 per cent.
“This is expected to expand Delhi’s urban limits, while re-directing realty development from other NCR towns towards the capital. This is also expected to mitigate Delhi’s housing gap, especially in the affordable segment,” said Anshuman Magazine, chairman and managing director, CBRE South Asia.
“If implemented successfully, it has the potential to emerge as a prototype for other state and municipal authorities for pooling land and encouraging private participation in urban development,” he added.
The policy was approved by the urban development ministry yesterday with five amendments, including timely external development of necessary infrastructure by the DDA, enabling farmers to pay development charges, ensuring mandatory housing for the poor, transparency in allotment of returnable land, and full utilisation of the approved floor area ratio.
Farmers willing to pool land but unable to pay development charges will be allowed to give up a part of the returnable residential land. In such cases, they will receive 35 per cent of the returnable residential land instead of 43 per cent. This will be exercised at the time of submission of applying for land pooling.
Developers shall undertake construction of houses for the poor amounting to 15 per cent of the floor area ratio above the maximum permissible.
Housing for the poor will be in independent blocks. Also, developers must ensure that the entire floor area ratio is utilised.
Photograph: Reuters
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