Haryana Cabinet Approves 12% Hike in Affordable Housing Rates for Gurgaon and Faridabad
The Haryana state cabinet has given its approval for a significant 12% increase in the allotment rates for affordable housing units in Gurgaon and Faridabad. This decision, taken under the Affordable Housing Policy 2013, is designed to breathe new life into stalled real estate projects but is expected to place a heavier financial burden on budget-conscious homebuyers.
Revised Price Caps and Implementation Details
The new price caps have been set at Rs 5,575 per square foot in Gurgaon and Rs 5,450 per square foot in Faridabad. These revised rates reflect the escalating project and construction costs that developers have been highlighting. The increase will apply to all projects where allotments have not yet been finalized.
The decision was made during a meeting chaired by Chief Minister Nayab Singh Saini on Tuesday. Applicants who have been selected in ongoing schemes will be required to pay the updated prices. Those who opt not to proceed with their applications can withdraw and receive a full refund without any deductions.
For projects that have already invited applications, draws will continue as scheduled. However, successful applicants must pay the price difference to align with the new rates. Previously, the allotment price in Gurgaon was Rs 5,000 per square foot, and the adjustment in Faridabad brings it to a level comparable with Sohna.
Background and Policy Revisions
The Affordable Housing Policy was first introduced in 2013 and has undergone multiple revisions, including updates in 2021 and 2023. In the most recent revision in July 2023, Gurgaon's rates were increased from Rs 4,200 to Rs 5,000 per square foot, while Sohna saw a rise from Rs 3,800 to Rs 4,500 per square foot. Despite these adjustments, developers have been advocating for further hikes, citing sharp increases in land acquisition costs, construction materials, and labor expenses.
Official Rationale and Market Impact
Officials from the town and country planning department stated that the latest revision is essential to ensure the viability of Affordable Group Housing (AGH) projects. "At earlier rates, developers found it challenging to launch or sustain projects. This revision is expected to unlock new supply in key markets like Gurgaon and Faridabad," explained a senior official.
This move comes against the backdrop of a prolonged slowdown in affordable housing launches across the National Capital Region (NCR). Over the past two years, no new AGH projects were initiated in Gurgaon and Faridabad, as developers were reluctant to build under the previous price caps. The policy, intended to provide budget homes to middle-income families, has faced criticism from buyers who labeled it a "paper promise" due to the lack of available supply.
Expert Opinions and Homebuyer Concerns
Real estate experts believe the revision could help restart stalled activity. "Land prices in Gurgaon have risen sharply in recent years, while construction costs have increased significantly. Without a price correction, projects were simply not viable," noted a city-based consultant.
However, for homebuyers, the increase translates to higher entry costs in a segment meant to offer financial relief. A typical affordable unit of 600–700 square feet, which previously cost around Rs 32–37 lakh, is expected to become more expensive under the revised rates.
Additional Approvals and Industry Reactions
The cabinet has also approved an increase in balcony charges in Gurgaon to Rs 1,300 per square foot, up from Rs 1,200, with a cap of Rs 1.3 lakh per flat.
Local realtors have welcomed the state government's decision as a timely step. Pradeep Aggarwal, founder and chairman of Signature Global, commented, "It reflects an understanding of the rising cost pressures developers have been facing over the past few years. Land prices, construction materials such as steel and cement, and labor costs have all increased sharply, often beyond the current price caps. While this revision offers some relief and may help revive supply, a more dynamic alignment with market realities will be essential to ensure sustained growth in the affordable housing segment."
Surinder Singh, director of GLS Group, added, "This revision is a positive move which can help unlock stalled projects and encourage fresh launches in key NCR. Developers have been struggling with escalating input costs, making it difficult to deliver quality housing within earlier price limits."
