Understanding Floor Area Ratio (FAR) in the Indian Real Estate Market

In the realm of Indian real estate, the term “Floor Area Ratio” (FAR) holds significant importance. FAR is a crucial urban planning and zoning regulation that dictates the extent of construction permissible on a piece of land. As a potential homebuyer, investor, or even someone interested in understanding the dynamics of real estate, grasping the concept of FAR is essential. In this blog post, we will delve into what FAR is, its calculation, and its impact on the Indian real estate market.

What is Floor Area Ratio (FAR)?

Floor Area Ratio, often referred to as FAR or FSI (Floor Space Index), is a vital urban planning parameter that outlines the maximum floor area that can be constructed on a specific piece of land. In simpler terms, it governs the ratio between the total built-up area of all floors in a building and the total area of the plot on which the building stands. FAR is implemented by local development authorities to ensure that construction remains within permissible limits, preventing overcrowding and promoting planned urban development.

Calculating FAR

The calculation of FAR involves a straightforward formula:

FAR = (Total Covered Area on all Floors) / (Total Plot Area)

For example, if you have a 10,000 square foot plot and the local authorities allow an FAR of 1.5, the total permissible covered area would be:

Total Permissible Covered Area = 10,000 sq. ft. * 1.5 = 15,000 sq. ft.

It’s important to note that the calculation includes all floors, including basements and mezzanine floors.

FAR in the Indian Context

The application of FAR in the Indian real estate market is of utmost significance due to rapid urbanization and the increasing demand for space. Different cities in India may have varying FAR regulations based on factors such as infrastructure, road width, environmental concerns, and population density. Metropolises like Mumbai, Delhi, and Bangalore have specific FAR regulations tailored to their unique urban challenges.

Impact on Real Estate

FAR plays a pivotal role in shaping the real estate landscape in India. Here’s how:

  1. Density Control: FAR helps control the population density of an area. Areas with higher FAR values can accommodate taller buildings, while those with lower FAR values have shorter structures, thus regulating population density.
  2. Property Value: FAR can influence property values. Higher FAR often leads to more spacious and taller buildings, potentially increasing property values due to improved space utilization.
  3. Urban Planning: FAR is a tool for effective urban planning. It encourages optimal usage of available land while maintaining a balance between green spaces and built-up areas.
  4. Infrastructure: By controlling the extent of construction, FAR indirectly impacts the demand on local infrastructure such as water, sewage systems, and roads.


In the intricate tapestry of the Indian real estate market, understanding Floor Area Ratio is akin to deciphering a key piece of the puzzle. As cities expand and populations grow, FAR serves as a guiding principle that ensures organized and sustainable development. Whether you’re eyeing a new property or simply intrigued by the dynamics of urban planning, keeping FAR in mind provides valuable insights into the evolving Indian real estate sector.

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