In the national capital, a person’s residential address is as important as the position he holds in society, and a South Delhi residential address is considered upmarket. Delhiites’ obsession with ‘South Delhi living’ has meant that residential properties in the area were always sold at a premium, but this situation is set to change with the new farmhouse policy (country homes) which permits one-acre farmhouses.
Till now, farmhouses in Delhi were only permitted on a minimum 2.5-acre plot of land, hence the number of farmhouses in the capital was limited to around 2,750, but the new farmhouse policy would permit construction of 10,000 square feet on a one-acre plot of land. This would mean that a few thousand farms would be added to the existing number. 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. Construction of farmhouses may soon be allowed by Delhi Development Authority (DDA) in 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 prices of builder floors and apartments in many upscale South Delhi localities, because the consumer has an alternative. People spending the kind of money needed to buy a South Delhi apartment would buy a one-acre property, construct 10,000 square feet and stay lavishly,” said Santosh Kumar, Chief Executive Officer, Operations, Jones Lang LaSalle India.
Kumar said many people have already started acquiring land for constructing farmhouses. High-profile corporate houses are on the lookout for land to construct lavish farmhouses for their promoters.
Already, prices in many South Delhi colonies have dropped anywhere between 15 and 25 per cent as investors and end-users are buying farmland. Builder floors of 350 square yard in Defence Colony are currently trading at Rs 8.25 crore to Rs 9 crore compared to Rs 10.50 to Rs 12.75 crore two years ago. Real estate consultants said at least 20-25 floors are on the block in Defence Colony currently, some are already constructed, some waiting for prospective customers. Similarly, 300 square yard builder floors in GK I and II are trading at Rs 4.5 crore to Rs 6 crore, down from a minimum of Rs 6.5 crore to Rs 7 crore in 2009-10.
The situation of other South Delhi colonies is no better; 300 square yard builder floors in Saket are currently trading at Rs 4.5 crore to Rs 5.5 crore compared with Rs 6 crore to Rs 6.5 crore a year ago. In upscale Vasant Vihar, 300 square yard builder floors have come down to Rs 8 crore, from Rs 12 crore a year-and-a-half ago, said Ashwani Singh Virk, MD, Jagson Realtors.
Residential floors in other South Delhi upmarket colonies like Panchsheel Park, Green Park, Neeti Baugh, and Friends Colony are also trading at lower rates compared with a year ago. “There is going to be a huge supply of one-acre farmhouses in Delhi, but these organised areas would take anywhere between three and five years to be liveable. Investor interest, however, has already shifted there,” said Samir Jasuja, chief executive officer of PropEquity, a real estate data and analytics firm.
Jasuja opined prices won’t crash, but they would go down; one must remember that prices had gone up so much over the past few years. Overall, fewer transactions are expected in South Delhi colonies.
Even as the South Delhi residential market is down, farmland rates are going up, hence investors feel it is sensible to invest in farmland for times to come. Currently, there is hardly any demand for ready floors.
Pradeep Jain, chairman of Parsvanath Developers, said, “The policy would spur the market and give a positive sentiment among consumers. This is a positive move by DDA. The one-acre farmhouse would become the preferred choice for people who want to have second homes and, of course, for investors.”
The Sunday Standard