Haryana government’s affordable housing where the state government is going to allot apartments constructed by developers. It is also likely to increase traction again as the cabinet increases the allotment rates by 20%.
This has also increased the cost of raw materials, where it has been demanded that the state government amend the rate as projects become unviable.
Pradeep Aggarwal, Founder & Chairman, of Signature Global (India) Ltd., said the higher rates would encourage developers to undertake more affordable housing projects while increasing the supply of affordable homes. This development brings positivity to the sector and ensures that homebuyers have access to quality housing options.
As per the latest report, the rates which is prescribed in the policy for the hyper and high potential zone (Gurugram, Faridabad, Panchkula, Pinjore-Kalka) which has been increased by Rs 800 per sq. feet on carpet area over the previous rate which was rs 4,200.
For other high and medium-potential towns, it has been proposed to increase rs 700 per square foot while rs 600 per sq. ft which is going to increase for low-potential towns. Pradeep Mishra, Founder, Homents Pvt Ltd. said the most impossible factor for affordable housing developers is the procurement of land, even though the cost of the land which was earlier around rs 6 to 8 crore per acre was increased to rs 22 to 25 per acre.
The selling price of affordable housing when it was launched in 2013 was rs 4000/sqft and later it was increased to rs 4200/sq ft in November 2021. Due to the increasing land cost, it has no more lucrative and profitable venture for developers as they can get to see the launch of affordable housing decreasing, he added.
The affordable housing policy was notified by the department on August 19, 2013. The objective of this policy is to encourage the planning and completion of group housing projects where apartments of predefined sizes are made available at predefined rates.
By adjusting the allotment rates to match the increasing construction and development costs, the government has created a favorable environment for real estate development to participate in the affordable housing segment actively. The decision has undoubtedly boosted the confidence of developers, encouraging them to invest in affordable housing projects and it also contributes to the overall growth and progress of the state’s real estate sector, commented Rajjath Goel, Managing Director, MRG Group.
The whole ecosystem is driven by the demand-supply matrix. Approximately 350 million people are estimated to be in need of affordable housing. It can also cater a sustainable and inclusive housing market where affordable housing projects can flourish, and individuals and families can find their dream at a reasonable price, said Ashwani Kumar of Pyramid Infratech.