The draft Master Plan for Delhi (MPD) 2047 may shift valuations in the capital’s real estate market from current property prices to future development potential, according to developers.
“The focus will increasingly shift from current property prices to future development rights, infrastructure readiness, redevelopment feasibility and access to public transport,” said Santhosh Kumar, vice-chairman at realty consultancy firm Anarock.
Experts add that the proposed changes in Floor Area Ratio (FAR), redevelopment and Transit-Oriented Development (TOD) could open up additional development capacity and make infrastructure access a key valuation driver.
FAR is a zoning tool used to control building density, which is calculated as the ratio of a building’s total constructed floor area across all floors to the total area of the plot it sits on.
The new TOD policy will promote planned, high-density and mixed-use developments within 500 metres on either side of the metro corridor and within a 500-metre radius around RRTS and railway stations.
The earlier policy allowed maximum FAR only on plots of at least 4 hectares (40,000 square metres) located on a 30-metre road. Under the new rules, however, plots as small as 2,000 square metres can be developed under the TOD provision if they are next to an 18-metre road, with a maximum permissible FAR of 5.
Calling the TOD policy a welcome step, Rahul Ahluwalia, founder and director at the Foundation for Economic Development, said the changes still fall short of being a transformational development.
“The FAR cap of 5, with charges applying from FAR of 4 remains conservative. Hyderabad’s Growth Corridor permits unlimited FAR, while comparable areas in Tokyo, New York and Melbourne allow FARs of around 13-30,” he added.
Its impact is likely to be most visible in areas where higher development potential coincides with improving connectivity, with emerging corridors such as Narela and the Rithala-Kundli Metro alignment seeing stronger demand for residential, institutional and supporting commercial development.
The plan, which will be forwarded to the Ministry of Housing and Urban Affairs (MoHUA) for notification, is aimed at catering to an estimated population of 3.2 crore in Delhi by 2047, a projected increase from the present 2.4 crore.
The draft includes tweaking of the floor area ratio (FAR) for development in 70 villages of Outer Delhi and a uniform policy for reconstruction and redevelopment of old DDA-built two-storey units on individual plots.
“The proposed opening of Green Development Areas across 70 villages for commercial and institutional activity, along with higher FAR and TOD, could improve utilisation of Delhi’s land resources,” said Nikhil Hawellia, secretary at developers’ body CREDAI-NCR.
Experts added that this could allow more housing to be created within the existing urban footprint.
“For developers, the policy direction creates greater opportunities to invest in redevelopment, premium and mid-income housing, while supporting a more efficient urban economy,” Hawellia said.
Ankur Jalan, chief executive officer (CEO) of Delhi-based Golden Growth Fund, said that FAR rationalisation, redevelopment and TOD could unlock housing and commercial supply across premium and mid-income segments.
He added that the additional supply within Delhi could take some pressure off neighbouring NCR markets.
Delhi has been facing a shortage of affordable housing even as the region absorbs a growing population.
According to a report by Anarock, the share of affordable newly launched homes priced below Rs 40 lakh fell from 62 per cent in 2020 to 11 per cent last year.
Most of the growth in housing units comes from outside Delhi because the national capital does not have regulations conducive to high-density construction.
The changes come after the policy was stuck and faced a bureaucratic delay of almost four years since the 2021 Master Plan expired.
Amit Goyal, managing director, India Sotheby’s International Realty, said that the delay contributed to the expansion of unauthorised colonies and unregulated farmhouse development, while pushing developers towards Gurugram and Noida.
He added that the move to ease the Unified Building Bye-Laws (UBBL) by cutting down the requirement for no-objection certificates (NOCs) will help improve the ease of doing business.
For developers, however, the value of additional development rights will depend on how quickly these provisions translate into actual approvals and projects.
“The treatment of unauthorised colonies, the Yamuna O-Zone, Green Development Areas and farmhouse areas will be critical, while roads, utilities and public transport will need to keep pace with higher density,” said a listed Gurugram-based developer eyeing expansion in Delhi.
The impact, however, will depend on final regulations, implementation and infrastructure delivery.
“Market participants should distinguish between proposals and enforceable rights until the plan and related rules are formally notified,” Kumar said.
