The National Capital Territory (NCT) is the second most populous metropolis in India after Mumbai. Delhi covers an area of 1,483 sq km and has a population of 16.8 million as per Census 2011, an increase from 13.9 million in Census 2001.
The city’s growth rate has slowed considerably during this decade — 2.1 per cent per annum as compared to 4 per cent per annum between 1991-2001. Delhi has undergone major infrastructural changes during the last decade. There are new roads, bridges and a modern metro transport system, making the Capital one of the most attractive cities to live in.
Real estate in Delhi has seen a tremendous growth in prices in the past few years. As the private builder policy is yet to be announced, the active involvement of developers and development authorities is yet to happen. The current real estate development activities are largely concentrated towards the development of builder floors and farm houses. As per the Master Plan (MPD) 2021, regularisation of unauthorised colonies and farmhouses is on the anvil, which will boost the real estate activity in Delhi. Also there has been a lot of speculative buying of land since 2007 when MPD 2021 was announced. It is worth mentioning that 50 per cent of Delhi, i.e. 60,000 hectares of land, is still to be developed and this presents a huge opportunity for developers.
Looking at the current scenario, there are no affordable regions left in Delhi, due to which people are moving to peripheral areas of NCR such as Greater Noida West, Crossing Republic, Kundli, Sohna Road and Dwarka Expressway. In order to introduce new affordable housing stock in Delhi, development policy is critical.
Master Plan 2021 has an enabling provision of private participation for development. This includes areas in the green belt, existing unauthorised colonies and various farmhouse developments in South Delhi. If development policy is announced by the government, new supply can be expected at Rs 5,500 – 6,500 per sq ft in new development zones. Development policy is expected to comprise three new policies which are farmhouse / country homes policy, land pooling policy and increased floor area ratio (FAR) policy.
Farmhouse Policy: The farmhouses which exist before February 2007 in Zone J and having area of 2.5 acre or above will be legalised after payment of a penalty. The other part of this policy states giving new licence in green belt for farmhouses which will have FAR of 15 to 20 for a one acre of plot.
Land Pooling Policy: This policy in new zones will bring up large contiguous parcels with infrastructure facilities by development authorities where group housing would be allowed.
Increased FAR Policy: There is also a say on increase of FAR of 400 to 600 in the Zones L, M and N.
There is a wave of builder floors happening in entire north and south Delhi. The fascination for exclusive addresses is the driving force behind these areas. Some of the areas where such activity is taking place are: Rohini, Punjabi Bagh, Kamla Nagar, Prashant Vihar and North Campus. In these areas, builder floors are available in the range of Rs 12,000 – 40,000 per sq ft.
The areas like Defence Colony, Greater Kailash, Green Park, Malviya Nagar, Maharani Bagh and Chhatarpur are prime residential areas in South Delhi. In these areas the builder floors are available in the range of Rs 20,000 – 55,000 per sq ft.
These developments in north and south Delhi will be impacted by the one acre farmhouse homes that would come up in Zone J or upcoming Zones L and N. This policy will lead to a flourishing villa market in Delhi NCR as compared to overpriced builder floors. In these new zones, the owners will be able to get a villa of larger size, i.e. 4,000 – 8,000 sq ft, against the builder floor of 1,500 sq ft within the same price.
Most of the mid-income housing stock in Delhi is developed by DDA. The authority, from time to time, announces schemes for various categories of flats. Trading in these flats is a Delhi investor's pastime and most of the stock is overpriced (Rs 8,000–15,000 per sq ft in various parts of Delhi).
Some cooperative housing societies have also come up but again no fresh permissions are being given, leading to overpriced stock. Other than DDA some key developers in the real estate have come up with their housing projects in Delhi under special schemes as seen in the table.
The other area being developed by private developers is Dwarka. This area has maximum number of multi-storey apartments and co-operative housing flats available. The most important factor in pumping the housing boom of Dwarka is Delhi Metro. There is also a diplomatic enclave which is proposed in Sectors 26, 27, 28 and 29 that will house embassies of at least 39 nations. This will also uplift the residential and commercial sector of the city. In this area, the housing apartments are available in the range of Rs 10,000–16,000 per sq ft.
One can only hope that good sense will prevail and government will announce the development policy soon, failing which Delhi may see another round of development of un-authorised colonies while suburbs continue to get out of reach of the common man.
— The author is MD, Bajaj Capital. With inputs from Sunil Agarwal, principal advisor, Bajaj Capital Realty