Owning a farmhouse feasible than buying apartment in South Delhi
Homebuyers in Delhi consider buying a farmhouse much more economical than buying an apartment in South Delhi. The present scenario of South Delhi property market is evident that the real estate seems to have lost its shine with the significant drop in busy construction activities of the region.
The prime colonies of South Delhi including, Hauz Khas, Panchsheel Enclave, Safdarjung Enclave and Green Park are witnessing thousands of vacant flats and partly built flats due to lack of buyers. Investors who were ready to shell out Rs 3 to 5 crore to buy properties in these expensive areas are not coming forward to invest now. Also the end-users looking for a luxurious living have been finding farmhouse option as a better option, as they can enjoy ample open space along with luxury and privacy in one-acre farmhouses.
Many potential investors are aiming towards property transactions in Noida and Gurgaon. Apart from this, the recent inclusion of one-acre farmhouse that was allowed by the Delhi Development Authority (DDA), has created a new hot platform for these investors.
While the new trend has been attracting huge investments from buyers and investors, on the flipside, it has highly affected the real estate business in South Delhi areas. Several market experts and property agents in Delhi have admitted that the sluggish market as well as the DDA’s policy of allowing small farmhouses has highly influenced the real estate in South Delhi.
Property rates in posh localities have witnessed a slump of 10 to 15 percent in the past year. Property agents operating in these areas have admitted that in the next few months, there will be nearly 10,000 flats, which will be ready to move in, or nearing completion. It has also been seen that many builders have reduced the property prices by around 10 to 15 percent in these areas.
Earlier, the minimum area required for a farmhouse was 2.5 acre, but as per the new policy under the review of Master Plan of Delhi 2012, the limit has been reduced to one acre. At present, with the introduction of one-acre farmhouse concept, plush flats of South Delhi areas have been facing strong competition.
The civic authority has also approved a higher floor area ratio (FAR) by permitting more built-up area. It has allowed owners to construct houses on up to 20 percent of the land as compared to 15 percent earlier. The DDA has also given its nod to 27 villages identified as ‘low-density residential area’, where one-acre farmhouses can be developed. Currently, an acre of land in such colonies for the farmhouses construction is priced around Rs 2 crore to Rs 6 crore.
For instance, if a buyer buys an acre land in a village for Rs 4 crore, and constructs a farmhouse at an average construction cost of Rs 3,000 per sq ft, and then the total work (land+construction) would be done in approximately Rs 7 crore.
One major concern with farmhouses is lack of amenities like power back-up, open spaces, parking, etc. It is expected that it would take at least 3-4 years for everything to be in place. By then the prices are also expected to rise by 200 percent. So for those looking for a horizon of more than 4 years, farmhouses will be an excellent choice.
Experts say that the economic slowdown has largely hit the real estate in India, particularly the markets of Delhi-NCR and Mumbai. Apart from this, abundant supply, fewer buyers and overall uncertainty have also lead to the market stagnation. Some people prefer demolishing their old bungalows and constructing flats for more profit. Also as the elections are approaching, people are in a waiting mode as they suspect of some policy changes after elections, said an expert. The same trend is likely to continue at least till the upcoming elections.
