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- HUDA’s extension directive sags prices
The Haryana government’s decision not to allow extension for more than seven years to the plot holders/owners in Haryana Urban Development Authority (HUDA) sectors for construction of houses has effected a crash-down in prices in real estate relating to residential pockets.
The prices of the commercial sites, however, have not been affected by the change in the policy of the government.
In a recent meeting of the HUDA, chaired by Chief Minister Bhupinder Singh Hooda, the “extension policy” was revised. According to well places sources there were reservations against revision of the policy in some quarters of HUDA and the government.
According to Regulation 17 of HUDA (Disposal of Land and Building) Regulations framed under HUDA Act, 1977, a period of two years is given to every plot holder (to be reckoned from the date of “offer of possession”) for the construction of a house. There was a provision to grant a further extension of 13 years beyond the stipulated period of two years on payment of prescribed extension fee.
As per the new policy, henceforth no extension shall be granted beyond seven years (including the initial stipulated period of two years (2 plus 5) years) after “offer of possession”. It has been decided that all such allottees, who have already availed a period of seven years, or will have done so by December 31, 2007, shall have to get the building plan sanctioned and complete at least “minimum required construction” on their plots. Moreover, they will have to apply for “occupation certificate” by December 31, 2008.
In effect, the remaining allottees, who have not yet availed the maximum permissible period of seven years, to be reckoned from the date of offer of possession, may avail the seven years permissible extension of seven years on payment of prescribed rates of extension fee.
The office order of HUDA headquarters with regard the change in the extension policy holds out a caution to the defaulters of resumption of their plots under Section 17 of the HUDA Act.
The cumulative effect has been a general scare on account of the government's bold decision to call the bluff of the plots owners. The general scare and the resultant fall in the price in the real estate in HUDA’s residential sector on account of the change in the policy is said to be due to the investments made by a large number of speculators and financers.
A realtor, Sumit Mudgil says about 90 per cent of those who have taken such plots are purely investors. Only 10 per cent of them are real users. According to the reports, there are a number of individual speculators who have made investments in more than one plots.
The general opinion in the real estate business is that there has been fall ranging from 20-25 per cent. For example, the rate in Sector 23 was about Rs 35,000 per sq yd. It has come down to about Rs 28,000 per sq yd after the announcement of the new policy. In Sector 9 and 10,the rate has come down to about Rs 10,000 per sq yd from about Rs 15,000 per sq yd.
In Sector 55-56, the rate has come down from Rs 45,000 per sq yd to Rs 42,000 per sq yd.
There seems to be domino effect creeping in as the rates in the “licensed areas”, where private builders are allowed to set up colonies, are taking a small dip.
According to official statistics, presently there are, in all, 7,690 vacant plots ranging from two kanal to two marlas, which will be affected by the new policy at the end of the stipulated period. They are spread over in Sector 4, 5, 5-11,15-IV, 7 and 7 Ext,9, 9-A,10,10-A,12-A,14,15-I,15-II,17,21,22-22B,23,23-A,30-P,31-32A and 41-P.
The popular opinion is that the price will further fall, and there is no scope for rise in the prices in residential quarters for some years. The reason being that as per the New Master Plan for Gurgaon-Manesar, there would be further expansion. Also, there was a scope for about 40,000 additional houses in the new master plan, which would see expansion of Gurgaon city and the development of nearby Manesar as a new township.CommentQuote0Flag