The affordable housing sector in Bengaluru with units costing under ₹ 45 lakh, is evoking positive response from buyers. According to Kishore Jain, president, CREDAI-Bengaluru, Sarjapur Road, Hoskote, Kanakapura Road, Mysore Road and Whitefield are the major markets for this category.
Mr. Jain, who has recently assumed the charge, said developers and realtors expected positive initiatives on several fronts in order to lend a push to the Union government’s ‘Housing for all by 2022’ programme.
While commending the reduction of GST to one per cent on affordable housing and five per cent for under-construction properties, he said GST on construction materials needed to be brought down. He said 28 per cent GST on cement and steel was prohibitive and only enhances the cost of construction. “CREDAI had approached the Union government with a request to reduce it,” he added.
Stamp duty
Mr. Jain urged the State government to bring down the stamp duty which is currently 6.5 per cent, citing one per cent duty in Telangana. It would help boost investment in property in Bengaluru. CREDAI has approached the government in this regard.
R. Nagaraj, vice-president, CREDAI-National, pointed out that during the last three months, around ₹46,000 crore was invested in stock market by foreign investors. He said the IT, ITeS and startup sectors were the major drivers of real estate business for Karnataka and hoped that the State, with particular focus on Bengaluru, will see more investment in the near future.
Timeline for approvals
Alluding to licensing fee of ₹80 per sq. ft. for plan sanction, Mr. Nagaraj termed it high and urged the State government to look into the demand for its reduction to ₹20 per sq. ft. for the affordable housing sector. He also pleaded for specific time limit for plan sanction and approvals. “As of now, the government has introduced online plan sanction, but it generally takes between four and eight months for the approvals depending on the size of the project. Specification of time limit would enable the developers to expedite the completion of projects, now that RERA is in force and delivery schedules needed to be conformed to.”
Sense of discipline
Austin Roach, president, CREDAI-Karnataka, said RERA (Real Estate Regulation Act) had positively impacted the real estate industry in the State and has infused discipline among the developers, thereby bridging the trust deficit between developers and buyers. He said the Act augurs well for the industry and set to improve the investment climate for buyers.
Latest trends
Adarsh Narahari, Chairman, PR and Media Committee, said that co-working, co-living and senior living were emerging as the latest trends in the real estate sector. He indicated that millennials were the new investors in the sector and the city is witnessing an upward trend in people opting for rental homes with services.
Funding critical
Experts were unanimous that funding, as ever, is a critical issue faced by the realty sector in India. They highlighted that due to deficient funding by the banks, developers were compelled to approach non-banking financial companies where cost of borrowing was high and led to escalation of cost for buyers. They agreed that Karnataka was a hotspot of real estate development and is expected to see a boom in the sector by 2020.
