The Haryana government has notified amendments to its affordable housing policy (AHP), 2013, with change in minimum area limit, project area limit, increase in commercial component and parking provisions. The development not only makes the segment more attractive to young homebuyers, but also paves the way for entry of reputed and prominent developers.
Analysts and market insiders have pointed out that even as affordable housing witnessed traction in the last two years, many reputed and prominent developers stayed away due to low margins.
After the notification, the maximum area limit for projects under affordable housing increased from 10 acres to up to 30 acres. Also, the commercial area has now been increased from 4% to 8% of net planned area. Besides, one car parking space for each dwelling unit will now be free. The amendments were notified on Monday.
“Millennial buyer, who was not keen on buying 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,” said Mani Rangarajan, group COO of Housing.com, Makaan.com and proptiger.com. Another positive development is the increase in commercial area in a project, which translates into more margins for developers, who are struggling with low profits, Rangarajan added.
Signature Global, a leading player in affordable housing in Haryana, said the state had been coming up with timely amendments to ensure that buyers and developers get maximum out of the segment.
“With the inclusion of optional car parking space, the state has ensured that people with cars should also come forward to buy their dream home. Haryana has also increased area of commercial in projects, which will help the developer provide more facilities to residents,” Signature Global chairman Pradeep Aggarwal said. Raheja Developers COO Achal Raina seconded Aggarwal’s views, saying, “The segment has the maximum demand and people do lap up these projects. However, many buyers were not buying due to lack of car parking space, which is a necessity these days.”
On the entry of prominent developers, Rangarajan said the project’s earlier permitted size forced many developers of repute to stay away as margins were not good enough. It is expected that big developers will enter the fray after these amendments. Many have already announced that they will be entering the segment.
“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 Gurgaon, Panipat, Karnal, Dharuhera, and Faridabad might see prominent developers enter the fray,” he added.
MRG World’s deputy managing director Vikas Garg also pointed out that the move allowed reputed developers to enter the market. “The decision will help the segment as it was the only segment that saw maximum sales and maximum number of new launches in 2020 as 70% of the all the launches this year happened in this segment,” he added.