November 20, 2013

Land Pooling Policy Announced by DDA to Control Property Prices in NCR

Delhi Development Authority (DDA) has announced the land-pooling policy which is aimed at freeing land and ensuring infrastructures is in place before construction starts in the new areas of the city under the residential zones. As per the policy around 1.5 million apartments will be launched over the next few years and will have a drastic impact on the property prices in the National Capital Region (NCR) which include Gurgaon and Noida.

Land-pooling Policy

Under this policy, the landowners can pool their land together for construction of infrastructure by the city’s land-owning agency. The landowners will be given 48-60% of it back once the infrastructure is set up.  The owners are allowed to build on this land themselves or give it to the realty developers. By involving private player in planning and development of residential and commercial components, the DDA is planning to bridge the gap between supply and demand in housing sector and the profits earned from the sale of their share will go to the private placers or landowners.

Property Prices in NCR

A senior DDA official mentions that as more homes and planned development will come up, there would be a definite slash of prices in housing sector. He further added that, this pooling policy is a substitute to the compulsory land acquisition and disposal process, as it will be difficult to acquire land under the new land acquisition bill passed by the parliament.

Property consultant DTZ states that this new policy will reduce the sharp rise in property prices in NCR areas such as Gurgaon, Noida and Gaziabad. These places have witnessed 150% increased in prices in the last five years.

Though it will take some time before the first project is launched under this policy but it will certainly have a calming effect on the property market in NCR region. But right now, clarifications are awaited from DDA.

 Property Prices in NCRAnckur Srivastava, Chairman of GenReal Property advisors states that after the pooling policy is in place the property prices in the satellite cities will not see the same kind of rise as it was happening in the last few years and from the buyer’s point of view it will be an ideal opportunity to acquire property in Delhi.

Few people like Mohit Gujral, Chairman of DLF Universal are not convinced that the move by DDA will lead to price reduction. He says that Gurgaon and Noida have already flourished and now they are more of an economic centre but opening of new areas in Delhi might slow the speed of growth in property prices. Mohit also points out that cities in NCR region have a large scale of economic activity and each of them including Delhi will compete with each other and it’s left upon the people to make the right choice.

6 comments: