REAL ESTATE GUJARAT

The township policy announced by the government of Gujarat recently has left many realtors of the city disappointed as it is very different from the drafts that were being discussed, they claim.
Following this, the realty sector of the city is abuzz with rumours of some of the realtors pulling out of the township policy. “We were contemplating a township project as it seemed profitable at the time, but when we took a look at the policy, we decided it was better for us to do a smaller project now and come back to the township project at a later date,” a realtor, who did not wish to be named, told Business Line.
The realtors have voiced concern that it would be costlier to build a township under this policy than to build a smaller affordable housing project under General Development Control Regulations. According to the new policy, real-estate developers can get a free floor space index (FSI) of 1, and to get an extra 0.5 they would have to pay 40-50 per cent of jantri rate. This pushes up the total cost of the project which would eventually be passed on to the end-consumers, said the realtor.
“The FSI to be provided is not appropriate as we would end up paying a higher price if we undertake a project under the township policy rather than one under the urban development bodies such as AUDA, GUDA and VUDA and other corporations,” he said.
Under the policy, a developer wanting to set up a residential township will need to buy a minimum of 200 acres of land in the urban development authority areas and 100 acres in urban authorities operating in municipalities.
The developer will need to set aside 60 per cent of land for residential purposes and use the rest for building common infrastructure such as roads, drainage, water supply and electricity.
Affordable housing
Townships or no townships, the affordable housing sector for the city is looking up with a slew of projects in the pipeline. Takshashila Realties Ltd is one such realtor bullish on the profitability of the sector. “There is excellent opportunity in the Rs 10- 25 lakh category right now,” says Mr Pratik Banker of Takshashila Realties, which is coming up with a housing complex in Naroda.
Priced at Rs 8-12 lakh, the housing society is not cheap accommodation with poor amenities but affordable accommodation targeted at the salaried class who take home an average of Rs 10,000-15,000 a month. Mr Banker says that 70 per cent of the market comprises this income group who cannot buy a house that is above Rs 20 lakh and yet require all comforts of life.
Keeping this in mind, each tower in the one, two and three BHK apartment complex will house a small library for children and guesthouses, the facilities of which can be enjoyed at a nominal fee. Parking space, lawn and other amenities would be free of cost, he added.
While he would like to see more participation in the space, he admits that low-cost housing has not captured as many developers as it should.
“While I would like to see low-cost housing to become a trend, the truth is that if land prices escalate, then the builders cannot do anything about it. The government can help by giving more FSI to bring down the cost of the scheme though,” he added.
Projects taking off
But going forward, the demand for low-cost housing is going to increase in comparison with that for high-end housing as it is a question of need versus choice, he said.
The township project of the Bakeri Group in the city is on track and 90 per cent of the flats have already been sold, said Mr Taral Bakeri, Partner, Santosh Associates. The houses are priced at Rs 6.5-8 lakh and a lot of people are coming in, he said.
Along with Godrej, other builders such as Safal Infrastructure Pvt Ltd and Ganesh Housing Corporation Ltd have also announced plans of townships in the city. As the policy states that 5 per cent of the area would have to be set aside for socially and economically weaker sections, the supply of affordable residential housing will grow.
Bharat Parekh a leading real estate consultant has seen a lot of buying pressure in new projects such as Nirvaan Group , Ambience Group , Bhavya Group in Ahmadabad in 2009 and hopes to see the same buying spirits in the new year 2010. He claims that mainly the buying is by NRI's who are moving out of the Dubai space and see great growth potentials in Ahmadabad.