Noida Extension takes lead; trend unlikely to spread to Gurgaon, other NCR markets.
There’s an interesting change sweeping through some real estate markets around Delhi. Builders in Noida and Greater Noida are doing away with charges, such as internal development charge (IDC), external development charge (EDC) and preferential location charge (PLC), among others, which account for 15 per cent of the total cost of a flat.
These builders are not forgoing these charges or paying from their pockets, but are simply including these in the base price. ‘We offer a fully-packaged price so that the customer doesn’t experience any surprise later,’’ said Brijesh Bhanote, vice-president, sales and marketing, 3C Company. Also, the customer ends up saving on taxes. For instance, if a builder charges separately for power back-up, the customer will have to pay a service tax of 10.3 per cent. But if the same was added to the basic price, the tax decreased to 2.5 per cent, said a builder.
| GLOSSARY OF CHARGES |
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Chairman of the RG Group, Rajesh Goyal, said since January, builders had started offering an all-inclusive price, which includes car parking. ‘‘These charges have not been waived, merely included in the base price,” he said. If a builder charged Rs 1,800 per sq ft at Noida Extension earlier, he’s now charging an all-inclusive price of Rs 2,600 per sq ft.
Earlier, builders often quoted a lower base price to attract customers. What’s driving the change is a 25-30 per cent oversupply in Noida Extension in the last eight months, which is likely to last for a year. However, the trend is restricted to Noida and Greater Noida. It is unlikely to spread to other markets, such as Ghaziabad, Faridabad and Gurgaon. Builders in Indirapuram and Raj Nagar in Ghaziabad are continuing with the old practices.
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| WHAT YOU WILL PAY IN GURGAON IF YOU BUY A 2000 OR 1500 SQ FT FLAT ON GURGAON'S UPSCALE GOLF COURSE EXTENSION ROAD, THIS IS WHAT YOU WILL HAVE TO SHELL OUT | |||||
| Basic Selling Price | EDC/IDC | PLC | Car park | Club membership | Other Chrgs (% flat cost) |
| BSP I Rs 1,20,00,000 | Rs 8,00,000 | Rs 4,00,000 | Rs 7,00,000 | Rs 1,00,000 | 16.67 |
| BSP II Rs 90,00,000 | Rs 6,00,000 | Rs 3,00,000 | Rs 3,00,000 | Rs 1,00,000 | 14.44 |
| BSP I is for a 2000 sqft apartment at Golf Course Extn Road with an average price of Rs 6000 per sqft. BSP II is for a 1500 sqft apartment with similar specs and prices | |||||
Head, business development, CHD Developers, Ravi Saund, said it was not possible for builders to do away with these charges in Gurgaon. ‘‘In Noida, EDC/IDC charges are so less (Rs 60/sq ft) that it doesn’t make sense to charge these separately. In Gurgaon, EDC is at Rs 300-400 per sq ft, which is substantial. It is difficult to merge it into the basic sale price. EDC goes to government, which spends it on setting up sewer lines and water treatment plants,” he said.
New players entering the market, such as Lemon Tree-Warburg joint venture, plan to sell according to the carpet-basis and do away with most of these charges. With time, all markets would move towards an all-inclusive price, said Bhanote.