New Delhi, Nov 15 (IBNS) Despite aggressive marketing and great offers made by developers on the eve of Diwali festival, the investment in the property have remained lukewarm due to high prices of houses in and around the NCR region, according to a latest survey.
Major factors cited have been high prices of land and the unprecedented rise in the cost of construction materials, iron, cement, labour etc., says an ASSOCHAM survey.
There has been a surge in demand of only 20% on the eve of the festival comparing to the normal average sale per month. The builders and the investors say like in the past they had been expecting 100% jump both in new and the huge inventories lying at the disposal of the developers on the festival seasons.
The survey was carried out in the major cities like Delhi-NCR, Mumbai, Bangalore, Chennai, Kolkata, Ahmedabad, Hyderabd, Pune, Chandigarh, Dehradun etc. The survey was able to gather information from 250 property dealers, noted 40 builders/ developers and 20 divisions of housing financing.
Majority of the developers have complaint that the inordinate delays in getting necessary approvals from multiple regulations and authorities result in cost and times overruns.
The another factor reported was that in the absence of industry status apathy of banks in financing the real estate projects, adds the ASSOCHAM survey.
The resale or secondary market was dull this festival season as there is very little resale going specially in the NCR and surrounding areas which shows that very few investors are there in the market says ASSOCHAM Secretary General D.S. Rawat while releasing the survey.
The property analysts have predicted that till March next year the demand for plots, houses and flats may drop by at least 15 to 20 per cent.
The housing inventory in the NCR area is huge as a large number of projects are coming up in the peripheral areas, said Rawat.
Rawat also said although the prices had generally remained stable - both for commercial and residential properties, the lack of buoyancy and weak investor sentiments have added to the woes of developers.
ASSOCHAM report said the government should act as a facilitator rather than a regulator of the real estate projects, particularly where demand is more than supply. Also, all approvals of real estate projects must be accorded in a time bound, accountable and simplifies manner.
Process and status of all approvals be made on line so as to bring transparency.
The state Governments should complete their land records process and make the same computerized and supporting infrastructure; not only transportation and logistics but also water, power, housing, healthcare and sanitation must be taken up in tandem, said ASSOCHAM.
The Government must grant industry status to real estate sector and the real estate projects must be classified as infrastructure and priority lending should be made available for keeping pace with the demand and supply scenario, it said.