Delhi Development Authority’s (DDA’s) new farmhouse policy makes provision for smaller 1-acre farmhouses as against the minimum size of 2.5 acres earlier, which could further impact property prices in prime south Delhi localities where prices have dropped by 10-15% in the last one year. These new dwellings called Country Homes will be allowed a higher floor area ratio (FAR) of 20 compared to the earlier stipulated 15. The new policy also allows owners to pay an extra charge for utilising higher FAR than what has been stipulated, said a senior DDA official, who did not wish to be named. Older farmhouses that have utilised higher floor areas than what was sanctioned are now being regularised by paying a penalty. Farmhouses in Delhi are only allowed in the peripheral green belt of the city but the government is yet to decide the areas in the green belt where it will allow these Country Homes to come up. “It will come in a separate notification subsequently,” said the official.
Allowing 1-acre farmhouses with higher FAR would peg them in direct competition with premium homes in south Delhi localities where apartments by builders cost almost as much. “Valuations in the south Delhi builder floor market will further drop by 5-10%,” says Anckur Srivasttava, chairman of GenReal Property Advisers. In the last one year, property prices in south Delhi areas like Vasant Vihar, Defence Colony, Panchscheel and others have dipped by 10-15%. “Many investors have already moved to these areas,” he said. In some of the villages in the green belt of Delhi, valuations have already run up by 50-150% in the last one year. The biggest boost has come in the last three to four months since the in-principle approval was given to the new scheme last year. “We’ve seen a number of enquiries come in over the last few months for 1-acre properties. It’s unprecedented,” says Arvind Mehtani, owner of Settlers India, a brokerage firm that has been dealing in buying and selling farmhouses since 1998.
Mehtani feels the initial demand will be more for farmhouses in existing prime farmhouse areas but will slowly move towards new areas, though prices in the newer areas are very reasonable at the moment. A number of newer areas that fall under Delhi’s green belt in the new master plan of the city are expected to see new farmhouses being set up. At the moment, land prices in villages bordering Gurgaon, like Jhatikra, Kanganheri, Nanakheri, Raghupur and others are running up because of the new policy but are still very competitive compared to south Delhi prices.