NAREDCO Champions Affordable Housing Amidst Booming Market
Bharat Agarwal, Vice President of NAREDCO, says, Builders have no incentives to build MIG homes due to lesser demand and margins
With the real estate graph booming to its zenith post-pandemic, National Real Estate Development Council (NAREDCO), the apex body of the real estate sector under the aegis of the Union Ministry of Housing and Urban Affairs, is striving to attain affordable housing, labour welfare, sustainable construction while advocating the concerns of all stakeholders to the government.
G Hari Babu, National President of NAREDCO, emphasised the importance of collaboration in unlocking the full potential of India’s urbanisation. He, along with other stakeholders of the apex body, addressed the media in the national capital on Friday.
Babu stated, “By working together, we can create sustainable, livable, and inclusive cities that foster business growth, promote social equity, and enhance the quality of life for all citizens. We look forward to fostering collaboration between the government and private sector stakeholders to ensure sustainability and pave the way for a thriving real estate industry that positively impacts the broader economy.”
He further acknowledged that the rising cost of accommodations in tier-1 and tier-2 cities is directly linked to tremendous hyperinflation in land prices. Left with one-digit margins, builders are also obliged to pay certain types of fees to the government, including the GST with no input credit. The unsold mid-sized inventories, typically 850 sq ft, are also one of the reasons developers neglect middle-income group (MIG) houses, leading to higher prices in premium and luxury segments.
Adding to Hari Babu’s sentiments, Bharat Agarwal, Vice President of NAREDCO, stated, “Builders have no incentives to build MIG homes due to lesser demand and margins. Subsequently, middle-class groups are compelled to live on the outskirts of the city where logistics hurdles become inevitable. Red tape is also among the major reasons for the rising prices in real estate. Delay in permissions due to multilevel approval from the Centre to the City council stretches the project completion from 18 to 24 months. Instead, simultaneous approval should be provided by the authorities to expeditiously resolve the delay in projects.”
RERA has been a game-changer when it comes to builders' obligations; likewise, there should be scope for ‘self-regulation’ in the real estate sector for smooth transactions in the business, added Agarwal.
He also recommended that, likewise in other countries, ‘Land Guarantee Title’ should be implemented in India, as suggested by Niti Aayog, to settle any dispute arising from the claim by certain stakeholders. Such an initiative will revitalise the trust between builders and customers.
Agarwal further added that higher interest rates and higher GST on construction materials also contribute to expensive real estate.
In addition to discussions, NAREDCO will advocate for the government's proactive role in promoting affordable housing.
It will request the introduction of a home loan interest rate subvention scheme and demand concessions in the prices of construction materials, such as cement and steel, for affordable housing projects.
These measures aim to incentivise and facilitate the development of the much-needed affordable housing segment.
NAREDCO is set to host its 16th National Convention on 2nd and 3rd February 2024, themed “The Changing Real Estate Landscape.” The convention aims to bring together key stakeholders to gain insights into the dynamics of growth and transformation in India’s real estate sector.
The convention will also serve as a platform to explore various facets of the sector and feature insightful discussions on government support, affordable housing, the impact of RERA, financing options, technology integration, and investment opportunities.
