In a significant move impacting the real estate sector, the Haryana government has announced a 20% increase in External Development Charges (EDCs), effective from January 2025. The decision aims to boost revenue for infrastructure development in urban areas but is likely to raise the cost of property development across the state.
What Are External Development Charges?
EDCs are levied on developers by the state government to cover the costs of external infrastructure such as roads, water supply, sewage systems, and electricity connections for new projects. These charges are eventually passed on to property buyers, potentially affecting property prices.
Impact on Developers and Buyers
Real estate developers in Haryana are expressing concerns over the timing of the hike, citing rising construction costs and an already sluggish market.
“This increase will significantly impact project budgets and may lead to higher property prices, ultimately burdening homebuyers,” said a prominent developer in Gurugram.
Buyers, especially those considering affordable housing, may face challenges as developers are likely to adjust pricing to accommodate the increased EDCs. Experts believe the move could discourage small developers and delay project launches in the short term.
Government’s Justification
The Haryana government has defended the hike, emphasizing the need for robust infrastructure to support rapid urbanization. Officials stated that the increased revenue would be utilized to improve basic amenities and ensure sustainable development in the state’s growing cities.
Key Cities Affected
The hike will have a pronounced impact in major urban centers such as Gurugram, Faridabad, Panchkula, and Karnal, where real estate development has been thriving. Developers in these cities may need to reassess their project budgets and timelines in light of the increased costs.
Industry Reactions
While some industry experts believe the hike is necessary for long-term infrastructure improvements, others argue that a phased approach would have been less disruptive.
“The government must ensure that the additional revenue is transparently and efficiently utilized to create world-class infrastructure,” said a real estate consultant.
What’s Next for the Market?
The real estate sector in Haryana is likely to experience a period of adjustment as stakeholders assess the implications of the EDC hike. Buyers and investors are advised to carefully evaluate projects for potential price escalations and infrastructure upgrades.
More from Assetree Updates
Stay informed about the latest trends and developments in the Indian real estate industry with Assetree Updates
Our platform provides valuable insights, industry news, and updates, complemented by expert opinions, market reports, and informative articles. With trustworthy and accurate information, Assetree is your go-to resource for all things related to the Indian real estate sector.
For inquiries or to connect with The Assetree Team, please write to us at sales@theassetree.com.
