In a move that is set to impact the real estate market significantly, the Haryana Government has announced an upward revision of External Development Charges (EDC). The Department of Town and Country Planning (DTCP) issued a notification today, stating that the hike is necessary to cover the rising costs of infrastructure development, including roads, sewerage, and water supply systems in urban estates.
The Impact on Real Estate The revision of EDC is a direct input cost for developers, which is almost certainly going to be passed on to the end-users.
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Price Hike: Real estate experts predict that property prices in prime hubs like Gurugram, Faridabad, Panchkula, and Sonipat could see an increase ranging from 5% to 10% depending on the location and project type.
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Gurugram Perspective: In Gurugram, where EDC rates are already among the highest, this hike will further push up the cost of luxury and mid-segment housing.
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Affordable Housing: Developers have expressed concern that the hike might affect the viability of affordable housing projects where margins are already thin.
Why the Hike? According to government officials, the EDC rates had not been adjusted in proportion to the inflation in construction material and land acquisition costs for public utilities. The additional revenue generated will be utilized by the Haryana Shehri Vikas Pradhikaran (HSVP) and other development agencies to upgrade urban infrastructure that has been under pressure due to rapid urbanization.
Developer and Buyer Reaction Real estate bodies like CREDAI and NAREDCO have requested the government to reconsider the timing of the hike, citing that the industry is still recovering from previous regulatory changes. “An increase in EDC at this stage will make homeownership more expensive for the common man,” said a representative of a leading development firm. On the other hand, potential homebuyers are rushing to finalize deals before the new rates are fully implemented by developers in their price lists.
