Builders have to think smart
Innovations in housing are the way out to leverage increase in land costs, says Vandana Ramnani
Land prices are expected go up by a whopping 70% if the new Land Acquisition Rehabilitation and Resettlement (LARR) Bill 2011, meant to replace the 117-year-old Land Acquisition Bill of 1894, becomes an act. What course of action will then be open to developers? Will they have to switch from affordable housing to expensive high-end residential units or will they manage to launch low-budget accommodation through innovative construction techniques?
Gaursons India Limited is planning to launch 500 units in the mid-segment and upper-mid segment in Noida Extension area once the land acquisition issue in the area is resolved. “These would range from 2000 to 4000 sq ft and cost around R2700 to R3000. This will help us leverage costs to some extent,” says Manoj Gaur, managing director, Gaursons India Limited.
Ajnara Group will also “definitely” look at launching products in the mid-segment category once the land row is resolved.
Land costs have a huge bearing on the prices of residential products. For developers, the solution lies in the government increasing the FSI and allowing them to build more on the same piece of land, thereby cushioning costs and not increasing unit prices. “This will help us build more saleable area without the end-user being impacted in any way,” says Prashant Solomon, joint managing director, Chintels India.
The Greater Noida Authority has passed a proposal to increase the floor area ratio (FAR) of group housing plots from 2.75 to 3.50, which was cleared at the authority’s board meeting in early September. Increasing the population density norm and FAR will enable builders to construct more and help them curtail land costs. Once approved, the authority will allow developers to build 3.5 times of the ground area. What this means is that 350 flats can be built on a 1 lakh sq ft plot.