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Noida unlikely to affect city real estate, but keep your eyes peeled
Source: Times of India
Dated: 14th July 2011

GURGAON: The recent Supreme Court ruling protecting the interests of farmers in Noida Extension has come as an eye-opener to all the parties concerned — the state, the developers and end users.

Ajay Dabas, director, Certes Reality Ltd, said, “Noida and Gurgaon created products in different price categories, and we don’t see a large shift from Noida to Gurgaon, considering that most projects in Gurgaon are already in the above-3,000-sq-ft category. Demand is likely to go up only in the initial sectors of the NPR like Sectors 109-112, which might see an appreciation in the prices of plots.”

The development also brings to light the fact that the builders need to be more transparent regarding the land they are developing and the buyers need to be more cautious about the status of the land on which their flats/houses are being built.

 

The Delhi opportunity
Source: Hindustan Times
Dated: 6th Aug 11

Will the housing stock available in Delhi under MPD 2021 be less expensive than the supply coming up in Gurgaon and Noida?

Issues related to one of the most precious resources on this planet ­ land ­ have been grabbing the headlines recently. There’s been much debate over the volatile situation in Noida and Greater Noida and over the draft Land Acquisition and Resettlement and Rehabilitation Bill, 2011, expected to be tabled in the Parliament in the ongoing monsoon session. Now, what one needs to know is the kind of impact this bill (when it becomes an act) and the Noida-Greater Noida fiasco will have on the 25,000 acres of residential land to be unlocked in Delhi under the Master Plan Delhi 2021.
The Gurgaon-Noida success story was based on the premise of scarcity of land in Delhi. It was the absolute dearth of land in the Capital that forced people to look for options in the periphery.

Delhi remained a distant dream for those aspiring to own properties here ­ a good indicator being the whopping eight lakh applications for the 4,500 DDA flats in 2008 and the over 12 lakh applications for the 15,000 homes in the 2010 housing draw.

If land becomes scarce in the National Capital Region (NCR) ­ what with the government being required to pay twice the amount for land it acquires (if the land acquisition bill becomes an act) and if a quick resolution to the Noida-Greater Noida problem is not found ­ will those aspiring to buy a home be left without any options?

Not likely, because of the nearly 14 lakh residential units expected to come up in the five zones envisaged under MPD 2021. This fresh supply is expected to have a stabilising impact on property prices in and around the national capital territory (NCT). It should be noted that the NCR will be redefined as the national capital territory under the new Master Plan and the NCT of Delhi divided into 15 zones under the new MPD.

Out of these A to H, P, M and K1 are in urban Delhi and J, K2, L, N and P2 fall in what is known as urban extension.
There are almost 4,475 hectares in zone N and 5,400 hectares in zone L, and each acre of land is likely to have about 80 dwelling units. The PPP model will be adopted for all developments under MPD 2021. It is reliably learnt that the private sector, which includes developers and institutional investors, has acquired more than 5,000 acres of land in zone N.

MPD 2021 envisages the creation of a land pool by builders themselves for all future housing projects. DDA will, however, have to work out a plan to get one-third of land required for roads, social infrastructure like police stations and physical infrastructure like waterline, drainage and solid waste management.

According to AK Jain, former Delhi Development Authority planning commissioner, the total number of units required by 2021 is 24 lakh. Almost 14 lakh units are to be provided in the five zones in MPD 2021. It is comparable to the number of units envisaged in the master plans of other micro markets such as Noida and Gurgaon. About 4-5 lakh units are to be built as per both the Gurgaon Manesar Master Plan 2025 and the Noida 2031 Master Plan.

As for the status of MPD 2021, “The policy of land pooling through private partnership will be placed before the authority first after various models are considered. It will then be sent to the government of India for approval as per the procedures laid down in the Master Plan,“ says Nemo Dhar, DDA spokesperson.

The immediate impact of this new residential stock will be on pricing of similar properties in Noida and Gurgaon.
Property prices will become more stable and competitive and Delhi will boast of reasonably priced mid-segment housing stock (see pg 1 box).

But is the cost of land in Delhi less expensive than the land parcels in Noida and Gurgaon? The cost of land in Delhi in zone N (urbanisable land for residential projects) is R1 crore to R1.5 crore per acre whereas in Gurgaon it is already available at R3.5 crore per acre. In Noida, the government acquires the land and then sells it. Delhi is now a free market and under MPD 2021, developers can buy directly from villagers. “The Delhi opportunity is attractive to institutional investors who are likely to coinvest millions of dollars here since the city is an end-user market. Even if one were to assume that a million units would come up within 10 years, a major part of this demand may get addressed at affordable prices,“ says Ramesh Menon of Certes Realty.

The Delhi State Industrial and Infrastructure Development Corp will execute several prestigious projects in the coming years. This will include a R1,200 crore knowledge based industrial park at Baprola and another one in Kanjhawala, with both likely to provide employment to about 5 lakh people. This is likely to perhaps result in reverse migration from the micro cities.

Will buying in Delhi be less expensive than Gurgaon or Noida?

NPR, Gurgaon

  • Cost of FSI: R1200 per sq ft
  • Cost of construction: R1400 per sq ft
  • Average selling price: R3500 per sq ft
  • Price in catchment area: R4000 per sq ft

Delhi (under Masterplan 2021)
MPD Zone N (New Rohini)

  • Cost of FSI: R400 per sq ft
  • Cost of construction: R1400 per sq ft
  • Average selling price: R3000 per sq ft
  • Price in catchment area: R6500 per sq ft

MPD Zone L (New Dwarka)

  • Cost of FSI: R700 per sq ft
  • Cost of construction: R1400 per sq ft
  • Average selling price: R4000 per sq ft
  • Price in catchment area: R7000 per sq ft

Noida

  • Cost of FSI: R500 per sq ft
  • Cost of construction: R1400 per sq ft
  • Average selling price: R2700 per sq ft
  • Price in catchment area: R3500 per sq ft

Status of the Master Plan 2021 –

  • MPD 2021 notified vide gazette notification number SO141 in February 2007
  • 15 zonal plans notified in June 2010
  • Local area plans currently under development
  • Policy of land pooling through public-private partnership awaited

 

Govt unveils draft land acquisition Bill
Source: Times of India
Dated: 29th July 2011

NEW DELHI: Amid a raging controversy over land acquisition, Government has unveiled a new draft bill putting in place a transparent, legal framework aimed at giving adequate compensation to land owners and ensuring rehabilitation of those displaced.

The much-awaited ‘The Draft National Land Acquisition and Rehabilitation & Resettlement Bill, 2011’, which has been put in public domain, says “in case of urban areas, the award amount would be not less that twice that of the market value determined whereas in rural areas it would be not less that six times the original market value”.

The draft bill proposes that the consent of 80 per cent of the project-affected families will be mandatory if the government acquires land for use by private companies for stated public purpose or PPP projects other than that for national highway.

It also states that the public purpose once stated cannot be changed.

The draft suggests that under no circumstances should multi-cropped, irrigated land be acquired. Most of such land lies in the Indo-Gangetic plains covering Punjab, Haryana, Uttar Pradesh, West Bengal and Bihar.

Also government will not be acquiring land for private companies for private purpose.

Observing that land markets in India are “imperfect”, rural development minister Jairam Ramesh said his foreword to the draft that there is asymmetry of power and information between those wanting to acquire the land and those whose lands are being acquired.

“That is why there has to be a role for the government to put in place a transparent and flexible set of rules and regulations and to ensure its enforcement,” he said.

The draft bill authorises the government to invoke “urgency clause” to acquire land in the cases of national defence and security purposes, rehabilitation and resettlement (R&R) needs in the event of emergencies or natural calamities and in any “rarest of rare” cases.

The salient features of the draft bill include a comprehensive rehabilitation package for land owners and livelihood losers, including the landless who are primarily dependent on the land being acquired.

It entails subsistence allowance at Rs 3000 per month per family for 12 months and Rs 2000 per family as annuity for 20 years, with appropriate index for inflation. It also makes it mandatory to provide employment to one member of family or Rs two lakh if a job is not offered and other incentives.

For land owners, it also has a provision of one acre of land in the command area (of the project) for each family if their land has been acquired for an irrigation project.

In case of land acquisition for urbanisation, 20 per cent of developed land will be reserved and offered to the owners in proportion to the land taken.

If a tribal’s land is acquired, one acre of land should be given to each Scheduled Tribes’ family in every project. It also says one time financial assistance of Rs 50,000 should also be given to the ST families, whose land is taken.

Ramesh said the Land Acquisition and Rehabilitation & Resettlement have been combined in one bill as they are two sides of the same coin.

Sonia Gandhi-led National Advisory Council (NAC) had recommended the government to combine the two.

“R&R must always, in each instance necessarily follow upon acquisition of land. Not combining the two- R&R and land acquisition- within one law, risks neglect of R&R. This has, indeed, been the experience thus far,” Ramesh said, adding the the Land Acquisition Act, 1894 has become archaic.

The Bill envisages establishment of a National Monitoring Committee for reviewing and overseeing R & R plans. For speedy disposal of disputes related to acquisition, compensation and R&R, the states shall set up Land Acquisition Dispute Settlement Authority.

There are 18 laws of the central government for land acquisition (like for highways, SEZs, defence, railways etc). The draft bill will enjoy primacy over other such laws, Ramesh said, noting, “the provisions of the draft bill will be in addition to and not in derogation of the existing safeguards currently provided for in these laws”.

He said the draft is fully compliant with provision of Forest Rights Act, 2006, and other statutes.

The bill seeks to “ensuring a humane, participatory, informed, consultative and transparent process and above all ensuring that the cumulative outcome of compulsory acquisition should be that affected persons become partners in development.”

Ramesh said in every case, land acquisition must take place in a manner that fully protects the interests of land-owners and also of those whose livelihoods depend on the land being acquired.

“Under our Constitution, land is a State subject but land acquisition is a Concurrent subject. So far, the basic law governing the land acquisition process has been the Land Acquisition Act, 1894. Although it has been amended from time to time, it is painfully evident that the basic law has become archaic,” he said.

The minister said the issue of who acquires land is less important than the process of land acquisition, compensation for land acquired and the R&R process, package and conditions.

“This draft Bill specifies these irrespective of the ratios of private and government acquisition. The objective is to make the process of land acquisition easy, transparent and fair for both sides in each instance,” he said.

Ramesh said his ministry has launched initiatives to update and digitise land records and to move from a presumptive system to a conclusive system.

Draft Bill

 

 


 

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