The industry body for real estate, Confederation of Real Estate Developers’ Associations of India (Credai), has urged the Karnataka government for a special package to revive the sector.
Credai-Karnataka has urged the state to do away with the No Objection Certificates (NOCs) for plan sanction, in order to cut down the time lost due to duplication of processes during development plan and building plan sanction.
“Land approval and buying is very cumbersome in Karnataka; the Land Revenue Act is very archaic. The source of financing is limited, the only thing that can reduce cost is timely approvals,” said Irfan Razack, the managing director of Prestige Group.
Credai said real estate and infrastructure growth have been drivers of economic growth as well as job creation globally, and India was no different.
The industry body also asked the state government to reduce stamp duty substantially up to September 2020, to exhaust unsold inventory and bring down the same to 1% for affordable homes and ensure registration under RERA in 30 days as per statute, to speed up the project launch process.
Balakrishna Hegde, mentor, Credai-Karnataka also pointed out the administrative hurdles that developers were facing in the state.
“The government should introduce strict timeline of 15 days for plan sanction to speed up revenue generation. The state should also allow substantial concession on plan sanction fees, etc for affordable housing,” said Hegde.
The residential property market is coming out of a 7-year downturn and select micro-markets are expected to bottom out in 2019 and 2020. Bengaluru led the sales of residential property in India in the first six months of 2019, with a 19.1% share against 20.7% in the same period of 2018. The city’s share of new residential supply during the first half of the current year was 25%, against 20% in the same period last year, according to real estate tracker JLL.
A funding squeeze has hit the real estate sector’s recovery and put pressure on property prices. The IL&FS crisis last year reduced lending by NBFCs during October–December 2018 due to a liquidity squeeze.
As many as 220 projects equaling 174,000 homes are completely stalled in the top seven cities alone, according to ANAROCK research. Construction activity on these projects, launched either in 2013 or earlier, have been stalled.