Aloysius Xavier Lopez
CHENNAI: With the decline in number of property transactions in the city and the lesser number of conversions of the enquiries generated in the housing sector in recent months, builders are turning towards affordable housing.
“The conversion rate is as low as 10 per cent. So we have planned to build affordable houses,” says Suresh Jain, Managing Director of Vijayshanti Builders.
However the builders claim that the delay in approval of the projects by the authorities concerned has a major role to play in increasing the project cost. So they say that the first move towards affordable housing would have to come from the authorities in terms of expediting processing of the files.
Officials of Chennai Metropolitan Development Authority say that the inability of the builders to provide the required documents for approval on time also contributes to the delay.
“The delay in processing of plan proposals makes cost of the apartment increase by around Rs.500 per sq. ft. A delay of a month for processing increases the cost by Rs.75 to 100 per sq ft. The cost is added not only on account of the interest on the loans, but also in the form of increase in the cost of construction materials and labour charges,” said M.K.Sundaram, Chairman of the Builders Association of India (South Centre).
“The number of enquires has come down and the new projects have declined. If the trend continues, lakh of workers in the construction industry will have no jobs after two months,” says a builder.
Providing affordable housing is one of the ways for the builders to prevent any deterioration of the condition of the housing sector, say builders.
“It is true that the private sector has not been involved in the housing of low-income group. But at the same time it is a fact that government is also unable to fulfil the demand for such sections of the society,” said Mr. Sundaram.
Now the stagnant housing market provides an opportunity for builders to tap this segment. Around 50 per cent of the housing demand is for EWS and LIG. Survey shows that about 32 per cent of the slums in the city are in private land and about 60 per cent of this land is owned either by Government or endowments and Charities.
“The housing for lesser income group can be addressed only by the joint effort of both Government and the private sector,” says T.Chitty Babu, CMD of Akshaya Homes.
“The relaxation in processing fee, development charges, infrastructure charges, metro water development charges for the EWS houses will reduce the cost by Rs.200 per sq ft,” said Mr. Sundaram. “Further relaxation in other levies and grant of certain exemptions can bring down the cost by Rs.800 per sq ft,” he added.