March 01, 2007

Increasing FAR will lower apartment prices

What will happen if the floor area ratio (FAR) in Delhi is increased beyond 400 from the present 200? The city grow vertically and realty rates will remain under check! Property experts feel that such a step would not only transform Delhi into a skyscraper city, but will also bring down the prices of apartments by as much as 35%. However, the prices of land - which can now sport upto 40 floors—can go up by 15%. Such a measure can make an extra 2.2 million 2 bhk apartments available, which will house around 10 million people. Says Deepak Bhavsar of Trammel Crow Meghraj Property Consultants, “The first effect of such huge space that will be available for development will be on the property prices. They will get stabilized and the exodus that had taken place to real estate Gurgaon, might stop. In fact,Delhi is always the first choice for many.” The Union urban development minister, S Jaipal Reddy, made this announcement while speaking at a symposium on “Delhi: Stepping towards Re-construction” at the Delhi Legislative Assembly premises on Monday. Reddy also said Delhi will soon have a statutory regulatory authority to monitor construction activities in the national Capital. “High-rise structures are needed in Delhi but in a modest and modern way. The MPD 2021 did not regularize everything but went by ground reality. Norms were relaxed for the poor, old areas and unauthorized colonies,” he added Encouraging vertical growth will act as a big boost for the housing sector in the city. However, city-based developer Amol Arora feels that the effect will take about six months to trickle down. “Property prices are expected to stabilize in the long run. But if the government does not provide for proper and adequate infrastructure, such policies will prove to be a death-knell for the city. Ultimately, they will stabilize in the next 2-3 years,” he said. Source:financialexpress