{"id":1903,"date":"2022-08-22T11:57:53","date_gmt":"2022-08-22T06:27:53","guid":{"rendered":"https:\/\/www.orionrealtors.com\/blog\/?p=1903"},"modified":"2022-08-22T11:57:56","modified_gmt":"2022-08-22T06:27:56","slug":"gurugram-builders-are-ditching-affordable-housing-projects","status":"publish","type":"post","link":"https:\/\/www.orionrealtors.com\/blog\/gurugram-builders-are-ditching-affordable-housing-projects\/","title":{"rendered":"Gurugram: Builders Are Ditching Affordable Housing Projects"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>The developers said affordable housing projects were no longer viable for them because the government had locked the price at Rs 4,200 per sqft.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">GURUGRAM: Builders in the city are preferring to develop projects on plots under the Centre\u2019s Deen Dayal Awas Yojana (DDJAY) than construct affordable houses. Although both schemes are intended at building affordable homes for the people, developers are increasingly inclining towards DDJAY for a flurry of reasons, including the lack of a price cap.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The developers said affordable housing projects were no longer viable for them because the government had locked the price at Rs 4,200 per sqft. With prices of land and construction materials shooting through the roof after the pandemic, the profit margins have obviously plummeted in such projects.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another reason why developers are slowly ditching affordable housing projects is that the onus of maintaining them lies on the builders ever after they have been sold.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On the contrary, there is no price cap or the liability of maintenance in DDJAY projects. These projects, which are mostly builder floors, are sold easily and help generate money from the first year itself, the developers pointed out.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to a rough estimate, a 2-3BHK in any affordable housing project will cost anything between Rs 20 lakh and Rs 28 lakh. In comparison, a builder floor under DDJAY will come for Rs 50-60 lakh and a smaller plot (&amp;lt;180 sq yards) for at least Rs 1crore.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Pradeep Agarwal, the chairperson of Signature Global \u2014 one of the biggest players in the low-cost housing market \u2014 said affordable housing projects were still in demand but plotted development was more lucrative for the developers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cFrom the buyers\u2019 point of view, plotted houses offer better appreciation and open living space, which have been in demand since the pandemic. Independent floors are now experiencing a boom as they offer speedy and quality constructions and are limited to four floors on every plot. Some of them also provide amenities like that in a gated society,\u201d he added.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Gurgaon, roughly, has around 100 ongoing affordable housing projects but less than 20% of them are complete. On the other hand, Gurgaon and Faridabad have witnessed the launch of more than 11,000 independent floors in the last year and a half \u2014 up from just 3,000 between 2016 and 2020.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Surinder Singh, the director of GLS group, admitted that affordable housing was losing its ground because of rising costs. \u201cThis is despite the fact that the government recently increased the price cap from Rs 4,000 to Rs 4,200 per sqft. But this is insufficient to make up for the rising prices,\u201d he said, adding that affordable projects also required a series of approvals and clearance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Mohit Mittal, the director of ROF group, said land prices had seen an almost 70-80% jump in the recent months while those of steel, cement and other construction materials had even doubled at a time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIn such a scenario, affordable projects are getting increasingly difficult to be executed. The DDJAY policy at least allows the developer to price the product strategically while maintaining the profit levels and viability for the buyers,\u201d he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Santhosh Kumar, the vice-chairperson of real estate consultants Anarock, said one of the major factors for the shift in preference was that builder floors could be sold individually. Many builders with land banks have now lined up for licence to construct independent floors, he pointed out.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Also, branded players like DLF, Signature Global, Trehan and Raheja are now taking the plunge in developing builder floors, which were typically constructed by local companies earlier.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Homebuyers, on the other hand, feel that builder floors under the DDJAY scheme are beyond the reach of most middle-class families.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe cost of plots under the DDJAY scheme starts from around Rs 70-80 lakh. If you have to construct a house on it, the total cost will come to around a crore. How is this scheme helping those looking for an affordable house?\u201d asked Deepak Verma, who works with a logistics company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">He said the government should ensure the cost of a house under the scheme remained under Rs 30 lakh.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An official in the town and country planning department said <strong><a href=\"https:\/\/www.orionrealtors.com\/affordable.html\">affordable housing projects<\/a><\/strong> were aimed at putting a stop to illegal colonies. \u201cAffordable projects, either under group housing or plotted development, have offered a relief to buyers looking for budget houses,\u201d he added.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Asked about builders looking to construct individual floors, the official said, \u201cWe can\u2019t force developers to opt for a particular scheme. We can only offer incentives in the form of price caps, relaxation in EDCs and allowing more area for construction.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Source: ET Realty<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The developers said affordable housing projects were no longer viable for them because the government<\/p>\n","protected":false},"author":1,"featured_media":1904,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[118,7],"tags":[],"class_list":["post-1903","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-affordable","category-real-estate-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Gurugram: Builders Are Ditching Affordable Housing Projects<\/title>\n<meta name=\"description\" content=\"The developers said 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