Haryana Increases FAR Rates by 20%, Home Construction Costs Set to Surge
The department of town and country planning (DTCP) in Haryana has announced a significant increase in the floor area ratio (FAR) rates for large plots. This move, which marks the first hike since 2016, is expected to impact the construction costs for home builders.
Rationale Behind the Rate Hike
The decision to increase FAR rates in Haryana is an attempt to address the rising demand for land, particularly in cities like Gurgaon, where population density continues to rise at a rapid pace. FAR is the ratio between a building’s total floor area and the size of the plot on which it is constructed.
Hike Details For Different Plot Sizes
According to the new directive, there are no changes in FAR rates for plots up to 250sqm. For plots between 250sqm and 350sqm, the FAR rate has been increased by 19% to Rs 4,500 per sqm from Rs 3,770/sqm. Similarly, the revised rate for plots between 350sqm and 450sqm is now Rs 6,500/sqm, up 21% from Rs 5,380 previously.
For plots larger than 500sqm, the increase is even higher at around 24%. The new FAR purchase rate for this category is estimated at Rs 10,000 per sqm, up from Rs 8,070/sqm.
Impact on Developers and Homebuyers
While the hike in FAR rates aims to bolster municipal development, many developers are concerned about the potential slowdown of large-scale residential projects and the resulting rise in construction costs. These increased costs could lead to a burden being passed on to home buyers, potentially affecting property prices in the area.
Worries of Potential Homebuyers
The increase in FAR rates has raised concerns amongst potential homebuyers, who have been struggling with high property prices in cities like Gurgaon. The additional cost burden posed by the rate hike may make it even more challenging for individuals to afford homes in such cities.
The DTCP’s Directive and Actions Taken
The directive issued by the DTCP states that plots up to 75sqm will not have the option to purchase additional FAR. The existing FAR rate for plots ranging from 75 to 100 sqm remains unchanged at Rs 1,615 per sqm. The DTCP has communicated these changes to various relevant agencies and instructed them to update their processes accordingly.
Conclusion
The increase in FAR rates by 20% in Haryana is expected to have a significant impact on large property construction costs. While the hike aims to support municipal development initiatives, it may pose challenges for developers who may have to reassess their project budgets. Homebuyers, on the other hand, may face increased property prices as developers pass on the additional costs. The long-term implications of this hike will unfold as construction projects adapt to the new cost landscape.
