The economic downturn three years ago brought to focus the concept of “affordable housing”. Builders in Mysore, like elsewhere, made the right kind of noises and the salaried class had some reasons to aspire for their own homes.
But three years down the line, no one hears about it.
What is more, there is hardly a property that can be classified under the segment. On the contrary, property values have sky-rocketed. . Even the few projects marketed under the category today are properties with reduced built-up area.
The key issue that has unsettled the segment has been the land price. Till a few years ago, land rates in and around Mysore was considered “within the reach” of the salaried class; and some of them did make the decision to purchase land taking loans.
But the increase in the popularity of Mysore as the next-best investment destination after Bangalore and the foray of the IT sector into the city has proved detrimental to low-cost housing projects.
Real estate boom
Mysore, a tier-II city, offers a quality of life that people searching for a second home option outside of the bustling Bangalore would look for. The state capital, with its traffic snarls, has forced residents to look outside. Mysore emerged a favourite destination.
The investors who came from Bangalore and other cities found the real estate rates relatively cheap. So, they did not wince while paying up. It ended up becoming a “boom time” for real estate sharks who acquired land from farmers at a pittance and made a killing in selling them.
This was not confined to sale of residential sites alone; industrial sites allotted by the Karnataka Industrial Area Development Board (KIADB) were purchased at dirt cheap rates ostensibly to establish “software companies.” Not one of them materialised but the investment on land fetched them good returns a few years down the lane as the rates for industrial sites too soared.
Fraudulent deals
Unscrupulous elements who had the foresight of demand for land made fraudulent deals with farmers as at Kochnahalli near Nanjangud and acquired nearly 600 to 800 acres of land ostensibly for a golf course and promised the villagers employment for generations to come. The land was acquired six or seven years ago at Rs.1.5 lakh to Rs.2 lakh per acre but it is now being put up for auction at Rs.25 lakh to Rs.30 lakh per acre.
The Confederation of Real Estate Developers Association of India (CREDAI) which held its State conclave in Mysore last July had made a plea for rationalisation and reduction of tax as more than 30 per cent to 40 per cent of the property cost passed onto the end-users was by way of sales tax, excise tax, stamp duty etc. But this is in the realm of policy issues and will not change overnight. Even if the Government was to forego its share of revenue accruing through stamp duty, the spiralling real estate price would still make up for 60 per cent to 70 per cent of the total property cost. This not only makes investment in property for the middle and lower middle class a chimera but makes housing unaffordable. So the onus is on the Mysore Urban Development Authority to expedite allotment of sites at affordable rates as a social obligation and clear the backlog of nearly 1.47 lakh site applicants so that salaried and the middle class can hope to construct their dream house.
