Affordable Housing Rates Revised to ₹5000 per sq ft
The Haryana government increased affordable housing rates for units by an average of 20% in a bid to rescue the sector. But according to housing experts, it could lead to an increase in the price of affordable homes and make it less accessible to ordinary people.
The rates in Faridabad and Gurgaon have increased from ₹4,200 per square feet to ₹5,000. Developers are appreciating this, but also said it could lead to an increase in the price of affordable units.
On last Friday, the Haryana government increased affordable housing rates of affordable projects under affordable housing groups up to 20% average to revive the affordable housing sector in Haryana.
In two potential zones of Haryana – Gurugram and Faridabad, the affordable rates have increased from ₹4,200 per square feet to ₹5,000 per square feet.
This decision was taken at a Cabinet meeting held on Friday by Haryana Chief Minister Manohar Lal Khattar.
Several developers of Gurgaon welcomed the decision to raise the rates, claiming that it will rekindle the waning demand for affordable homes. However, according to some housing experts, the rise in the price will lead to more affordable.
The Department of Town and Country Planning (DTCP) announced the affordable housing policy on August 19, 2013.
Balcony Rates Revised to ₹1,200 per sq ft
The government also declared that, following the revisions, balcony prices will be raised by 200 square feet, to ₹1,200 per square feet, to allow developers to recuperate the additional construction costs through increase in balcony charges.
The developer, on the other hand, welcomed the rate increase and claimed that it would assist them help manage the projects as input costs had increased significantly.
Chairmen & Founder of Signature Group Stated
According to Chairman & founder of Signature Group, Pradeep Agarwal, the increase of affordable price was necessary, because else the projects for affordable housing would no longer be financially sustainable. Also, the cost of cement, bricks, steel, and other materials, have increased significantly in recent years.
More significantly, it is no longer profitable to start affordable projects at an earlier price due to the increase in land costs and materials. This is a positive step that would increase the market for affordable goods, he said.
Impact of Increasing Rates in Affordable Housing
However, some experts did not welcome this decision. However, it was not well received by the experts, who claimed that the hike in price is expensive and it would no longer be affordable for the average person.
The increase in affordable housing projects prices are excessive and unjustified. Affordability will be greatly impacted, pushing homes out of the reach of the average person. Developers’ price increases beyond Rs. 1 crore have rendered already planned constructions under the Deen Dayal Upadhyay Jan Awas Yojana of Affordable Housing unprofitable, they noted.
Real estate Expert Vinod Behl Stated
As per the real estate expert Vinod Behl, “The increase in affordable prices will prove to be counterproductive to the state government’s affordable housing policy and the Center’s policy of ‘Housing for All’ because it could lead to an end of the buyers who buy homes under the Haryana government’s affordable housing scheme.
Apart from harming reduction homebuyers, the reduction in affordable home sales will also harm the builders as well, especially due to increased rates of property prices and home loans, the shares of affordable homes has been reduced.