Green Belt reduction may send property prices down

Property prices may go south
The Times of India

Bangalore: The new CDP could breathe new life into property development and simultaneously bring some relief from the scorching real estate prices.

Two measures — the opening up of a large portion of the green belt and increase in floor area ratio (FAR) — will increase the supply of real estate. This, in turn, is expected to soften prices of property.

Some 248 sq km of the green belt is being made available for expansion of the city. Most of this is along a stretch extending from Hosur Road to Doddaballapur Road. While a lot of unauthorised development has already happened along this belt, there is still a significant portion of land that remains undeveloped and that could now be available to developers for residential and commercial projects.

As for FAR, it has been increased from levels of 1.75/2.25 to 2.75/3.25. A higher FAR means that more floor area can be created on a given plot of land, if necessary by building additional floors. This also increases supply of space. A number of builders are already considering utilising this new opportunity.

“We expect an easing of prices, especially in Whitefield and Ring Road/Sarjapur Road. Prices had risen very high in these areas,” says Sobha Developers managing director J.C. Sharma. Mayank Saksena of Chesterton Meghraj Property Consultants says lifting of the green belt paves the way for large projects like integrated townships and gated communities (villa projects) that will markedly increase supply of space.

However, some like B.M. Jayeshankar, president of Karnataka Ownership Apartments Promoters’ Association do not expect much of an impact on prices because developers “were expecting this extra land to come in and had factored it into their calculations.”