Real estate developers in the city on Friday said that affordable housing was not possible in a city like Mumbai and that real estate prices would increase towards year-end, due to shortage in supply of housing stock. They also put the blame on lack of initiative by the government and faulty policies.
“Large-scale affordable housing cannot be a reality. If a developer says he is creating it, I can challenge that,” said Niranjan Hiranandani, managing director, Hiranandani Group of Companies.
Developers present in the Confederation of Indian Industry (CII) real estate conclave said that the government’s attitude towards creation of affordable housing was poor and the sector should be encouraged by subsidies instead burdening it with taxes. “32% of the total cost of creating affordable houses is spent on taxes. The amount because of corruption is separate, as proposals are not given otherwise,” said Hiranandani.
“Mumbai is the financial capital of India, but more than 50% of its population lives in slums. There is scope for development but the government should support us,” he added.
Another concern was the multi-window system for procuring building approvals. “Give us a single window system and we can assure a price reduction by 25%,” said Lalit Kumar Jain, Chairman, Kumar Urban development Ltd.
“Affordable housing cannot be a reality till the government wants it. Delay in approvals lead to a huge cost for the developer,” said Nainesh Shah, executive Director, Terraform Realty.
The developers also predicted that property prices would see a 10-15% increase after Diwali. “There is a risk of rising prices as the supply in the market has dried-up due to the approval process. People are holding on to their demands due to rising interest rates on the home loans and in the hope of lower rates in the near future,” said Sandeep Runwal, Director, Runwal Group.