Rising interest rates, cost of materials are cited as major factors

Inordinate delay in getting approvals from development authorities is putting a toll on the real estate industry in the State, which is already facing the pinch of rising interest rates and the cost of construction materials.

Addressing a press conference organised by the Confederation of Real Estate Developers' Association of India (CREDAI) Tamil Nadu here on Thursday, T. Chitty Babu, its president, said that about 680 files are waiting to be cleared for the last six months, with 429 pending with DTCP and 256 with CMDA. Nearly 43.5 million sq ft is awaiting development in Chennai alone.

Major hurdle

“Getting approvals has always been a hurdle in the State with no single window clearance system and a long waiting period, but in the last six months it got worse with no files being cleared,” said Mr. Babu, adding that no major launch of project happened in the city as well as in the State in the period.

He said that CREDAI has already put its representation to the Government and is yet to hear from it. “We want a single window clearance,” he said.

CREDAI members, including those from Madurai, Tiruchi and Coimbatore, expressed concern on “stagnation in the real estate sector” in the State and how the government was also losing out on many opportunities, including revenue by taking time to approve projects.

Talking about how to make better use of the 10-12 million sq ft of IT space lying vacant in Chennai alone, Ajit Kumar Chordia, Treasurer, CREDAI, Tamil Nadu chapter, suggested that the State should follow the Mumbai example of widening scope of IT buildings to cover financial and insurance companies.

“Some kind of scheme can be introduced to convert IT buildings into non-IT space for hospitals and retail purpose,” he said.

N. Nandakumar, Secretary of the Chapter, pointed out that input costs especially price of cement has increased by 100 per cent in one year. “Neighbouring States are able to offer us at a lesser price and we also get unrestricted delivery. Not just that cement price is the highest in Tamil Nadu,” he said. Price of river sand has increased from Rs.24 to Rs.50 per cft while cement price is Rs. 280 for 50 kg bag. “With the exorbitant price of raw materials we are not able to define our input cost,” he said.

Prakash Challa, immediate past president of CREDAI Tamil Nadu, raised concern at rising interest rates adding to the cost of housingMembers also expressed concern about Tamil Nadu being not able to attract migrant labour, and pointed to other friendly initiates being taken by States such as Karnataka and Maharashatra.