Covid has significantly altered people’s preferences around owing a house, particularly among the HNIs and ultra HNIs. As the pandemic rages on, these deep pocketed buyers are preferring to own self-sufficient properties outside metros with lot of green area, especially farmhouses.
The demand has more than doubled in the last 12-18 months with prices of such properties gradually inching upwards, especially in the country’s biggest luxury farmhouse market, Delhi NCR. Here prices have appreciated by 20-25% on an annual basis.
“About 20% of our transactions in Delhi NCR since March 2020 are farm houses, with the remaining being city centre homes — apartments, bungalows and builder floors. Pre-Covid, about 92-93% went with city centre homes, while the rest were farmhouses,” India Sotheby’s International Realty (SIR) CEO Amit Goyal told FE.
This number is likely to grow further as the demand pipeline is very healthy, he noted, adding, “This 20% may become 25-30% in the next 6-8 months as people are opting for larger standalone spaces with more play area, office area, etc.”
The price of farmhouses in Delhi rose 20-25% Y-o-Y as on March 2021 with demand rising in most of the good localities, particularly DLF Chattarpur, Westend Greens, Radhey Mohan Drive, MG Road, Sultanpur, Vasant Kunj, Satbari area, etc, Goyal said. Other growth areas are Bijwasan and Kapashera, near the Delhi airport. Besides, Noida has also seen some deals activity in the past few years, he added.
In Mumbai, farmhouses are largely around Lonavala and Alibaug. The country’s financial capital is more into apartments vis-a-vis independent homes, Goyal said, adding, “Mumbai office has also witnessed a trend like Delhi’s. Mumbaikars are more keen to move 40-60 minutes away, pick up larger homes and spend more time there”.
However, luxury farmhouses are largely a Delhi-based phenomenon and is not a preferred choice in cities like Bangalore and Kolkata, he pointed out.
Although demand is on the rise, there is a big deterrent in the form of sanctioned built-up area, Goyal said. “As per current policy there is very little that one can build in farmhouses. It has to be minimum 2.5 acre and above land parcel. On that piece, one is allowed to build 4,500 sq ft including basement. Most clients find this as a deal breaker. Generally, a family asks for 7,000-8,000 sq ft space. This drives away demand,” he added.
However, with the DDA’s draft Green Development Area (GDA) policy this issue will be addressed with a relaxation in floor area ratio (FAR) norms, which will encourage many buyers.
Another is that today, a lot of people opt for one acre farms. However, very few have approval for regularisation, which is not there otherwise for below 2.5 acre plots, he explains.
“So if this acreage comes down then more people can afford farms. In such a scenario, the price range would come down between Rs 15-30 crore. It will open this segment to rich millennials, C-suite executives, etc,” Goyal emphasised. For the sake of comparison, a 2.5-acre plot sells for anywhere between Rs 50-75 crore in Delhi NCR depending on the area.