Affordable to the rescue

Pradeep Sharma

Affordable housing drove the recession-hit realty sector in Haryana in 2018. With the real estate yet to recover from the effects of demonetisation, goods and services tax (GST) and teething troubles in implementation of RERA, affordable housing segment emerged as the king in the current year as the builders focused on consolidation rather than expansion.

 In view of  large unsold inventories in residential, commercial  and retail sectors, a majority of the builders preferred not to venture into new projects, but instead, preferred to dispose off the existing stocks by offering discounts and other incentives. However, in view of the general recession(builders call it correction), the realtors was partially successful in disposing off their units. 

 In fact, BJP government’s thrust on Housing for All by 2022 saw it dole out certain incentives to the private builders of the affordable housing projects such as increased density per acre (300), more floor area ratio (FAR) and relaxation in the payment of the  external development charges(EDC).  The simplification of Change of Land Use  norms and introduction of the concept of Transferable Development Rights (TDR), on the  pattern of Maharashtra, was also aimed at giving a fillip to the housing, especially affordable housing in NCR, including Gurugram. 

In fact, Gurugram, which till a few years ago was considered to be beyond the reach of the common man, is emerging the hub of affordable housing. Ditto for other towns in the non national capital region(NCR) where the apartment culture made its presence felt  this year.

However, the affordable housing continued to have ‘locational disadvantage’ as majority of these projects came up in far-flung and new emerging areas, where infrastructure continued to be primitive. To address this issue, the Haryana Government effected a major amendment in relevant rules setting up an exclusive EDC Fund for the upgrade of infrastructure. Earlier, all EDC collected from the state was routed to the centralised fund. Similarly, the Haryana Government succeeded in getting Metro to new areas in its cities like Gurugram and Faridabad to New Delhi.

 With the opening up of the Kundli-Manesar-Palwal Expressway and the Haryana Government announcing its decision to develop five state-of-the-art cities along the expressway besides a Global City adjoining Gurugram, affordable housing has a bright future in the National Capital Region(NCR) as it catered to the wider section of middle and lower middle class. “Since there is enough inventory for premier and  luxury segments, affordable housing with liberal government incentives offer a wide scope in the new emerging areas along the expressways and in the vicinity of the major cities, especially in the NCR. Improved Metro connectivity is icing on the cake,” says Faridabad-based real estate promoter Naveen Jain.

Tidying up colony mess

Meanwhile, regularisation of 535 illegal colonies by the BJP Government  across the state, including in Gurugram and Faridabad, has sent the builders in these cities in a tizzy. The builders, who were hoping to get buyers from among the illegal squatters are in for disappointment as the illegal constructions had been legalised at a nominal penalty. In fact, builders’ inventories continued to pile in the wake of demand-supply mismatch. With Lok Sabha and Haryana Assembly elections due next year, more illegal colonies are set to be regularised,  which would be a cause of concern for the builders and promoter. 

In view of the elections, stakeholders are adopting a wait-and watch policy. In fact, the realtors are not expecting any spectacular short-term recovery in the market with supply outstripping demand.  This coupled with craze for commercial and retail sector, which offer better returns than the residential segment, seems to have taken the  sheen off the residential segment. There has reportedly been  a shift to  the commercial and retail sectors from the residential sector by the investors. 

No room for speculation 

Speculation, said experts, is a thing of the past in the wake of the implementation of the RERA, which had promised better compliance and better transparency. The implementation of RERA has infused a new confidence among the investors.

In fact, Haryana has the distinction of having two RERA Benches at Gurugram (for Gurugram only) and Panchkula (for rest of the state) and both had been quite active.