Will Delhi's new housing plan help bring down prices?

[anuj_bansal]

http://www.moneycontrol.com/news/specia ... 37971.html

New Delhi has always had sky-high property prices thanks to shortage in housing. This has helped in the successful mushrooming of suburbs like Gurgaon and Noida.

Ahead of the state elections in November, the Delhi government has some plans. The state-owned Delhi Development Authority (DDA) plans to come out with a new policy to double the permissible built-up area for new group housing projects. Simply saying, these new buildings will be taller, maybe above 12 floors.

This as the proposal is to hike the floor area ratio (FAR) from 200 to 400. For commercial real estate, the proposal is to hike FAR by 66 percent to 250. All of this will not be for across Delhi, but only for pockets of new urban areas being planned by the DDA. For example in new urban extensions beyond Rohini in West Delhi, ahead of Dwarka near the airport, and even the Chhatarpur area which is normally associated with Delhi's sprawling farmhouses. Taller buildings may also be permitted within 500 metres of Delhi's metro corridor.

Anshuman Magazine, CMD, CBRE, says "The main objective of the government is how to cater to the large population which is increasing in Delhi and National Capital Region (NCR) and how to really bring prices down."

So, if the thought process is correct, the only way the prices can come down is if the supply is increased. People get better facilities to live in, the quality of life improves. However, infrastructure needs to be augmented.