Land prices likely to slip as Haryana puts fourth floor construction on hold

GURGAON: With the state government putting construction of the fourth floor on hold, the cost of residential plots in the city is likely to come down, according to real estate experts.
Property owners and home developers had invested in residential plots in licensed colonies to make margins in stilt-plus-four floors, leading to a steep rise in land cost after the state government allowed construction of four floors through a policy amendment in 2019.
“With only three floors permitted on residential plots, the margins are likely to fall and so will the demand for plots, leading to a dip in prices,” city-based real estate expert Avinash Kumar said.
The cost of a builder floor, however, is likely to rise as many have already bought land at higher prices. For instance, a residential floor in a stilt-plus-four-floor building in DLF areas ranges between Rs 5 crore to Rs 7 crore, he said. “Now, with only three floors allowed, the price of a builder floor may increase where the developer has already bought land at a higher price,” Kumar explained.
Santhosh Kumar, the vice-chairman of Anarock, a real estate consultant firm, said the move could have a big impact on the prices of properties. “Given that land prices in and around the city have skyrocketed over the years, builders looked to gain from building more floors. With this move, they will now mostly increase prices for flats. This could be a setback for homebuyers,” he said.
“On the other hand, it will give some respite to the already overburdened infrastructure in the city, including civic facilities such as sewage, water and electricity. It will also help in controlling haphazard development,” he added.
Narender Yadav, president of Gurugram Home Developers and Plot Holders Association, said DTCP has collected more than Rs 1,000 crore as FAR and development charges. “The authorities can upgrade the existing infrastructure with these funds. Stopping the construction of four floors is not the solution,” he added.
Rama Rani Rathee, chairman of Gurgaon Citizens Council, which had filed a petition demanding ban on the construction of the fourth floor, said: “After the fourth floor was allowed, there has been a rapid increase in construction. This has created huge infrastructural, parking and environmental problems which haven't been addressed by the authorities. The state government has collected huge amounts from development and FAR charges. These funds should be spent on infrastructure.”