http://www.thehindubusinessline.com/industry-and-economy/article2907505.ece?homepage=true
Brace for 10-30% price rise, delivery delays: real estate players
Real estate players have said housing customers should brace for a 10-30 per cent rise in property prices in 2012-13. Also, delivery delays and speculative price spirals could further pinch the customers" pocket in the forthcoming fiscal, they warn.
Mr Navin M. Raheja, Chairman, Raheja Developers, said, “In all likelihood, prices will rise in the medium-term. The cost of land is going up. Funds are restrictive and material cost is also steadily rising. Speculative prices have slowed sales. People with disposable income are also driving up the prices so there is a huge demand-supply issue.”
Residential property
Residential property accounts for 80 per cent of real estate market in terms of volume, growing at about 35 per cent annually.
Mr R. R. Singh, Director-General, National Real Estate Development Council (NAREDCO), said that the Government needs to unlock land value to help end consumers. “There is a huge land bank. Government should sell it at cost price to bidders. This will help ease the demand supply issue.”
Also, he said the Reserve Bank of India"s latest notification to banks to exclude stamp duty, registration and like charges while calculating the value of a property they intend to finance, will lead to defaults and also higher price at the consumer end.
“The notification effectively means home buyers would have to arrange for more funds on their own, as banks will not lend for these charges any more. This could lead to a further decline in home sales in the lower and medium segments and also put additional burden on consumers,” he said.
Asked whether the draft Real Estate (Regulation & Development) Bill, 2011 would help in making the sector transparent, Mr Raheja said the draft was highly disappointing and against developers. “We believe that the regulator could be just another authority apart from local and State authorities, which could lead to delay in sanctioning of projects and be a source of corruption.”
Projects delayed
Meanwhile, Mr Santhosh Kumar, CEO – Operations, Jones Lang LaSalle India, said, as many as 63 large residential projects in NCR (accounting for almost 40,000 units) are delayed by over four years.
“Out of these, around 10 projects with 9,000 units have been delayed by over six years. This includes projects wherein possession of a small percentage of units has been handed over, while most of the whole project remains incomplete,” he added.
Keywords: Real estate, housing customers, Residential property
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Arun Gupta
