Developers ditching affordable housing projects due to Price lock & low profits in Gurugram
In the millennium city where owning a home is dream for many individuals, developers are choosing to develop projects under the Deen Dayal Awas Yojana (DDJAY)-eligible plots above building affordable homes. This programme aims to provide people with affordable housing, hence DDJAY is increasingly preferred by developers for a variety of factors, including the absence of a price cap.
The developers have claimed that because the government had set the price at Rs 4,200 per square foot, they could no longer make money on cheap home projects. The profit margins in such projects have undoubtedly decreased as a result of the pandemic’s skyrocketing land and building material costs.The responsibility for sustaining affordable housing projects stays with the developers even after they have been sold, which is another reason why developers are gradually abandoning them.
On the other hand, lack of price cap and several maintenance obligations in DDJAY projects on developers are the reason why they are abandoning such projects. The developers said that these developments, which are primarily builder floors, are quickly sold and contribute to making money as early as the first year.
A 2-3BHK in any affordable house complex runs you around Rs 20 lakh to Rs 28 lakh whereas a builder floor under DDJAY will cost between Rs 50 and 60 lakh, while a smaller property (around 180 square yards) will cost at least Rs 1 crore.
Less than 20% of the affordable housing projects currently under construction in Gurgaon are finished. Over 11,000 independent floors have been launched in Gurugram and Faridabad in the past 15 months, compared to just 3,000 between 2016 and 2020. Affordable initiatives are becoming more and more difficult to carry out in this situation.
Plots under the DDJAY programme start at a price of about Rs. 70–80 lakh. The whole cost will move close to one crore if a person builds a house on it. The government should make sure that price of a home offered through the programme should remain under Rs. 30 lakh.