By Vipin Agnihotri
N
Maharashtra’s draft housing policy is all set to be completed this month and will look into the areas of affordable housing, rental housing, transparency among other things. The best part about all this is that state government has accepted its role as a facilitator and enabler and is making attempts to erase the constraints faced by the real estate industry.
“The government could not be a mute spectator to the rising prices in residential real estate and affordable housing was a objective which it was striving towards,” pointed out SS Kshatriya, Principal Secretary, Housing Department, Government of Maharashtra. He also added that the sale and purchase of property on carpet area basis would be made mandatory.
When asked about the issue of having a regulator for real estate, he said, “When you liberalize a segment of industry, there is corresponding requirement for regulation, and real estate will follow power and telecom, in terms of having a regulator.”
In my opinion, spectre of rising prices in real estate may need to be regulated as well, but if the industry would do it by itself there might not be the need for state government to step into the regulation aspect as regards to pricing levels.
If experts are to be believed, the emphasis should be on creation of new areas with infrastructure and facilities rather than further developing existing urban areas. At present, land costs constitute around 50 percent of the total project cost and was largely responsible for the high prices.
Until and unless supply increases, through freeing up of land locked under the Urban Land Ceiling and Salt Pan reservations, the concept of reduced prices will remain just a mirage. If one flat is chased by ten buyers, prices will always rise. “While the unchecked speculation in North India has resulted in a price correction, other parts of the country have not witnessed a change in prices as yet,” pointed out Anuj Puri, Country Head, Jones Lang LaSalle Meghraj.
The challenge lies ahead as to how to provide housing solutions for all segments. The government should go out of city centres and develop infrastructure. The secret of reducing prices is to create surpluses and that is only possible if restraints on FDI are removed.
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1 comments:
brilliant and informative article
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