Real estate prices in upmarket South Delhi, which is the preferred residential address of the capital’s rich and the famous as well as home to majority of the farmhouses or country homes located here, have dipped following the new farmhouse policy announced by the Delhi Development Authority (DDA).
Until now, it was mandatory for the farmhouses to have a minimum 2.5-acre plot of land and hence the number of farmhouses in the capital was limited to around 2,750. But under the new policy, it will be perfectly legal to erect a 10,000 sq ft building on a one-acre plot.
And this would mean that a few thousand farms would be added to the existing ones. Hence, for the kind of money one spends on a builder floor in a posh South Delhi colony, one can stay in a farmhouse, complete with plush lawns and even a swimming pool.
The construction of farmhouses may soon be allowed by the Delhi Development Authority (DDA) in the 26 villages falling in the green belt area, most of them in South Delhi areas like Asola, Chhattarpur and Satbari.
“The new farmhouse policy would have an impact on the prices of builder floors and apartments in many upscale South Delhi localities, because the consumer has an alternative. Also, even though the rates are high in South Delhi, there are issues like car parking problems, but even then prices in South Delhi are high because there are a large number of people who want a residential address here,” said Santosh Kumar, CEO, Operations, Jones Lang LaSalle India.
Already, prices in many South Delhi colonies have dropped anywhere between 15 to 25 per cent as investors and end users have diverted their money to buy farmland. Builder floors of 350 square yard in Defence Colony are currently trading at Rs 8.25 to Rs 9 crore compared with Rs 10.50 to Rs 12.75 crore two years ago.
Similarly, 300 square yard builder floors in Greater Kailash 1 and 2 are trading at Rs 4.5 to Rs 6 crore, down from a minimum of Rs 6.5 to Rs 7 crore in 2009-10.
“It is true that property prices in South Delhi were unnecessarily inflated over the past four years. The prices skyrocketed two years ago, even though the amenities remained the same,” said Ashwani Singh Virk, MD, Jagson Realtors.
Even as the South Delhi residential market is down, farmland rates are going up, hence investors feel it is sensible to invest in farmland.