The Affordable Housing segment is set to get a major boost with the Haryana Cabinet’s go-ahead for amendment in Affordable Housing Policy-2013 Haryana Development and Regulation of Urban Areas Act 1975 for change in Minimum Area Limit, Project Area Limit, Increase in Commercial Component, and Parking Provisions. After the latest guidelines on December 23, developers would be able to increase the number of units, and the buyers who were not booking flats because of the lack of parking space will now come forward.
The Affordable Housing segment was seen as the minimal facility accommodation, and it was all about four walls. No car parking space in the project was a hindrance, and the inclusion of one car parking space will increase the segment’s popularity. Though affordable housing has the maximum demand, many buyers were apprehensive due to the lack of car parking space; now, with one car parking space to be given in the projects, the demand will get a further boost. The millennial buyer, who was not keen on buying in a project without a parking space, will now invest in it as many of them understand the importance of owning a real estate asset, and affordable housing is the easiest way for them as it comes with minimum investment. Another boost is the increase in the commercial area in the project that will mean more margins to developers struggling with low profits.
The project’s size can now be up to 30 acres from 10 acres earlier, which is a big enough size to come up with a large number of units and work speedily towards achieving the target of housing for all. The project’s earlier permitted size forced many developers of repute to stay away from this segment as the margins were not good enough for them. The ongoing projects can also benefit from the decision if 2/3rd of the allottees agree to change in the development plan. We do not see any problem as buyers will be getting an extra benefit, and they will not mind a minor change in the plan to include a car parking space. The year 2020 saw increased traction in tier II and tier III cities post-COVID-19. The latest decision will lead to several projects in such cities in Haryana. We foresee that cities such as Gurugram, Panipat, Karnal, Dharuhera, and Faridabad might see prominent developers enter the fray.
The decision will help the segment as it was the only segment that saw maximum sales and the maximum number of new launches in 2020 as 70% of all the launches last year have happened in this segment. The step is commendable as the government has not put any additional burden on the buyers, who will get everything in the same price. For developers, the commercial has been increased from 4 per cent to 8 per cent, which will help them get some good margins out of the affordable project and work more aggressively towards this policy. So far, the Haryana government’s policies have worked well on both the demand and supply side. This is a New Year gift by the government to the segment, which performed well even during the pandemic’s challenging times.