Property Price in Delhi Might be Slow Down

Property prices across the Delhi are likely to decline by 15-20 percent over the next couple of years after the government cleared the decks for land pooling in the periphery of Delhi. According to professionals, the price of property in Delhi will fall once there is a constant supply in the Delhi real estate market, which could happen in the next three to four years. "Prices have moved very quickly since the notification of a land pooling policy by the Delhi Development Authority (DDA) in 2013. Now, after finalization of the policy, prices in the south and central Delhi and parts of Gurgaon and Noida will correct at least by 15-20 percent," a source said.

Declining sales have hit the real estate market because of weak demand and high prices. Though emotions have turned positive over the past few times, there has been no activity on the ground. Experts are of the view that demand will only rise if prices correct to reasonable levels. According to the Delhi Master Plan-2021, the Delhi Development Authority (DDA) will undertake urbanization of about 20,000 hectares of land in association with the private sector. The development on the outskirts of Delhi will bring in 1.4-1.6 million dwelling units.

Delhi Development Authority (DDA) has been not able to acquire land over the past ten years, which has forced a composite combining under the Delhi Master Plan 2021. The total population of Delhi is around 17 million and is conventional to reach 23 million by 2021. The master plan explores to build homes for all Delhiites. "Combining will help make more land available for properties, which will bring down the enormous prices dominant in Delhi. It will also provide land for affordable and budget housing. Since most of the region coming under this rule is in remote areas, the results of the system cannot be expected to be visible in the short term," said Supertech Chairman and Managing Director RK Arora.

In the theory notified in September 2013, owners can pool land for development by the DDA. Instead of rectification, 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 acres. The ground inclusion has also been increased from 33 per cent to 40 per cent. "This is expected to expand Delhi’s municipal limits while re-directing realty development from other NCR towns towards the capital. This is also supposed to mitigate Properties in Delhi gap, especially in the affordable segment," said Anshuman Magazine, chairman and managing director, CBRE South Asia.

"If implemented successfully, it has the promising to develop a prototype for other state and municipal authorities for combining land and promising private partnership in urban development," he added. The terms and policy were approved by the urban development ministry yesterday with five amendments, including the modern 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 utilization of the approved floor area ratio.

Farmers willing to pool area but unable to pay development charges will be allowed to give up a part of the returnable residential property. In such cases, they will receive 35 percent of the returnable residential area instead of 43 per cent. It will be operated at the time of compliance of applying for land combining. Developers shall engage in the construction of houses for the poor amounting to 15 percent of the floor area ratio above the maximum permissible. Housing for the poor will be in free blocks. Also, developers must ensure that the entire floor area ratio is utilized.

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