| Sandeep Rai and Neha Bhatia
Recently held The Economic Times Realty Convention, 2009 brought forth the who's who of the realty sector that included developers, policy makers, financiers and big names from eco-efficiency sector among others on one integrated platform.
The discussions therein highlighted the burning issues pertaining to the fallout of recession on the property sector, the current scenario and the future challenges. The prominent portion of the discussion was focused on the dire necessity of bridging the yawning gap between the demand and supply of affordable households in the country, a serious but neglected sector till a year ago. Dr. M. Ramachandran, secretary, union urban development ministry, put the shortfall figure as 24.7 millions homes.
The global recession brought with it a ray of hope for all those who could not afford a house thanks to the evergrowing prices in the realty sector. The key discussion in the convention revolved around affordable housing- a dream that the new age real estate developer has envisioned. The focus on affordable housing over the last one year is actually a marked change from the past when real estate players were primarily targeting high priced premium housing schemes. "Part of the slowdown was caused by rush of real estate companies to go for top-end housing," said urban development minister S. Jaipal Reddy while addressing the convention. Realizing the seriousness of the situation, the minister informed that the urban ministry was in talks with the ministry of finance to make an interest subsidy and other tax incentives to borrowers on loans of Rs 20 lakh to be raised to Rs 30 lakh. Rohtash Goel, CMD of Omaxe Ltd and president of National Real Estate Development Council (NAREDCO), echoed the minister's sentiment on the issue and said, "This is the time when the real estate market will witness fundamental change for now buyer will look for need based accommodation. He will be highly cautious and choose on the basis of performance rather than euphoria. With the focus shifted to affordable housing, the real estate sector will now speak more about volumes." He showed optimism in the changing scenario but raised some concerns on the tax code and asked for more relaxations for the developer community.
Addressing the concerns about shortage of land, Anshuman Magazine, CMD, CBRE India, said, "There is a lot of discussion on how do you get affordable land? The government can't acquire land and give it free to a developer. It is really infrastructure. The more infrastructure which is developed, more land supply can come in." To this Amit Mookim from KPMG, added, "When we talk about infrastructure, look at hospitals, look at education, in that entire premise itself which can give the developer additional revenue streams and the government will be more than willing to actually support in building out that infrastructure."
In current times one of the most pertinent questions relates to the sector's role in reducing global warming which is set to pose some serious environmental threats in the near future if warming process is not reversed and that requires concerted effort from all areas. Reddy particularly emphasized on the need to development of the 'green houses'. He said, "We are about to launch a project to create sustainable habitat aimed at developing green buildings ". He also urged the developer community to develop homes with inbuilt energy saving measures. Adding to this Mili Majumdar, associate director, Sustainable Building Science, The Energy Research Institute, said, "There is an unrealized potential which the developers are not realizing within their own selling platform. They have a huge potential in sustainable development to attract consumers. Instead of selling high-profile sanitary fixtures it is better to sell energy efficiency and also it doesn't cost anything. It is a win-win situation. There is a need for this concerted approach. We need intervention at the policy level and awareness needs to come both at the developer and consumer level to incorporate these in the main stream. "
Another area that was widely discussed in the convention was about the irreversible process of urbanization that was gradually clogging up 400 plus cities of the nation. The rising need for better infrastructure was elaborately talked about. In that context, the main points in the government's flagship scheme Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for a period of seven years (2005-2012) with an allocation of Rs 50,000 crore, to develop quality infrastructure and governance in the urban cities of India was discussed by the representatives of the ministry. According to Ramachandran, "There are issues pertaining to infrastructural development which are addressed in the JNNURM since unless there is |
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