Approval delays lead to hike in property rates: Survey
New Delhi- Owing to delay in initiating projects, prices of properties in India have shot up by 40 percent, reports Economic Survey 2013.
Before the construction activity of a project has to be started, the builder of the project has to complete 34 procedures to get clearances which would take at least six months time which is very time-consuming and needs to be changed.
The average time taken by builders for getting approvals is 196 days. The real estate sector in Indiahas been facing so many such issues. Within this time the average sales value would have increased by 40 percent, states the report.
According to the latest World Bank report, India has been listed among the top countries in terms of housing and workspace needs, but it stands in the 182nd position in construction permission processes.
The report says that there are some issues which need to be addressed soon to overcome the delays happening in the sector. Some of them include rapid increase in land prices, absence of a long-term funding and lending market at fixed rates, existing lower floor area ratio in cities, limited developer finance, the Urban Land Ceiling Regulations Act (ULCRA) continuing in some states, high stamp duties and difficulties in land acquisition.
Real estate and the housing sector have contributed to 5.9 percent in India’s GDP and witnessed a growth of 7.2 percent in the fiscal of 2011-12. The growth of the realty services has been impressive consistently at over 25 percent since 2005-06 with 26.3 percent rise in 2011-12.
The survey also reveals that the property prices have moderated during the current fiscal. As per the National Housing Bank RESIDEX index for the quarter July-September 2012 compared to April-June 2012 (covering 20 cities, with 2007 as base year), there is a general fall in prices of residential properties in some smaller towns, while the increase in other cities is mostly marginal, states the report.
Over the years, increased urbanization have led to increase in demand for residential projects in India. Task Force on Housing Requirements in urban areas estimates that during the Twelfth Five Year Plan Period (2012-17), there was a shortage of dwelling units is 18.7 million units, of which 18.5 million are for the economically weaker sections (EWS) and lower income groups (LIG).
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