Pune builders seek lower rates, reforms

The change of power at the Centre and some immediate policy moves can reinvigorate the moribund real estate sector, the developers and builders in the city have said.

The industry players expect the Narendra Modi-led new government to give due attention to the sector particularly in terms of easing of interest rates and speedy clearances for the projects, the lack of which has contributed significantly to the cost escalation in the recent past. "Pune is at the forefront of the sustainable housing movement that is sweeping the country, and any further encouragement to developers and buyers of green housing projects will have a beneficial effect," said Sanjay Bajaj, managing director for Pune at real estate advisory company JLL India. We expect the new government to reboot the regulatory framework. Fast-track approvals for new projects will increase supply, which will help in keeping the city's property rates rational, he added.

Focusing on realty reforms, developer and chairman of the Confederation of Real Estate Developers Associations of India (Credai) Lalit Kumar Jain said the new government should take up the reforms, which should encompass the administrative, banking, tax and legal aspects of the sector. "We look forward to achieving the objective of mitigating the housing shortage and minimizing corrupt practices," he said. "Efficient and accountable governance in the approval process is the need of the hour which the centre should immediately initiate and ask states to strictly adhere to," he said.

Kumar Gera, chairman of Gera Developments and founder president of Credai, recalled the very positive steps taken by Atal Bihari Vajpayee-led NDA during 1999-2004. "One does expect that housing, along with infrastructure will get the much needed impetus. Coming up with policies that will create affordable housing will fuel numerous other allied sectors and contribute significantly to the country's growth," he said.

Experts have already pointed out that a special regime to address the issue of interest rates and funding will benefit all stake holders. Sunil Rohokale, chief executive and managing director of the ASK Group, said the government should strive for interest rate of 6% for home loans and 8% for business loans.

Anshuman Magazine, chairman and managing director CBRE South Asia Pvt Ltd, said: "If GDP growth picks up, one of the early beneficiaries would be the realty sector. However, the economic fundamentals have to be tackled, infrastructure projects must be implemented with a sense of urgency and housing mortgage interest rates would have to decline before we could see any significant impact in the real estate market."

Raising the issue foreign direct investment (FDI), Rajesh Krishnan, managing director and chief executive officer, Brick Eagle, said that the new government will have to look at easing of FDI norms in the sector for the sake of affordable housing projects. "Many developers do not have access to FDI as the minimum possible investment is $5 million. On the demand side, we would like to see more regulation on behalf of the end-user, who presently has very little protection while entering into an agreement with a developer," he said.