Gurgaon: Affordable housing units in Gurgaon and Faridabad are set to become costlier after the state cabinet approved 12% hike in allotment rates under the Affordable Housing Policy 2013 — a move aimed at reviving stalled projects but likely to pinch budget homebuyers.The new cap has been fixed at Rs 5,575 per sq ft in the city and Rs 5,450 per sq ft in Faridabad, reflecting higher project and construction costs flagged by developers. The revised rates will apply to projects where allotments are yet to be made. The decision was taken at a meeting chaired by chief minister Nayab Singh Saini on Tuesday.Applicants selected in ongoing schemes will be required to pay the revised prices. Those who choose not to proceed can withdraw and receive a full refund without deductions.The new rates will apply to all projects where allotments have not yet been made. For projects that have already invited applications, draws will proceed as planned, but successful applicants must pay the price difference.The allotment price in the city was Rs 5,000 per sq ft and Faridabad’s cap brings it at par with Sohna.The policy, first introduced in 2013, has undergone multiple revisions in 2021 and 2023. In the last revision in July 2023, the city’s rates were raised from Rs 4,200 to Rs 5,000 per sq ft, while Sohna saw an increase from Rs 3,800 to Rs 4,500 per sq ft.Despite these hikes, developers were pushing for further revisions, citing sharp increases in land acquisition costs, construction materials, and labour.Officials said the latest revision was necessary to ensure the viability of affordable group housing (AGH) projects. “At earlier rates, developers found it difficult to launch or sustain projects. The revision is expected to unlock new supply in key markets like Gurgaon and Faridabad,” a senior town and country planning department official said.The move comes against the backdrop of a prolonged slowdown in affordable housing launches across NCR. As reported by TOI earlier, no new AGH projects were launched in the city and Faridabad over the past two years, with developers unwilling to build under the previous price caps. The policy, aimed at providing budget homes to middle-income families, came under criticism from buyers who called it a “paper promise” due to lack of supply.Real estate experts said 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,” said a city-based consultant.However, for homebuyers, the increase means higher entry costs in a segment meant to offer relief. A typical 600–700 sq ft affordable unit, which earlier cost around ₹32–37 lakh, is expected to become more expensive under the revised rates.The cabinet has also approved an increase in balcony charges in the city to ₹1,300 per sq ft, up from ₹1,200, with a cap of ₹1.3 lakh per flat.The city-based realtors hailed the state govt’s decision as a timely step.“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 labour 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,” said Pradeep Aggarwal, founder and chairman, Signature Global.“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,” said Surinder Singh, director of GLS Group.
