Realtors may take a hit up to Rs 9,000 cr on account of restriction on use of 30 mn sq ft of floor space available under easier FAR rules
Realty developers in Noida, on the outskirts of the national capital, are set to take a hit of up to Rs 9,000 crore, thanks to a recent Allahabad High Court order that bars them from using about 30 million square feet of floor space available to them in their existing projects under a liberal floor area ratio (FAR) regime.
Amid a scramble for fresh land, as vertical growth becomes severely restricted, prices are likely to rise 20 per cent, pushing up apartment prices, too.
FAR is the relationship between total floor space in a building and the area of the plot it stands on. A higher FAR allows builders to grow vertically on the same piece of land, reducing their need to acquire more land.
By conservative estimates, the average sale price for a square foot of property in Noida is Rs 5,000 - Rs 2,500-3,000 of that is floor space price and the rest is construction cost. So, a combined loss of 30 million sq ft means the developers will not earn the Rs 7,500-9,000 crore they could have made by selling that space.
with thanks : Business Standard : LINK : for detailed news.
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