Affordable housing like healthcare and education is a huge
problem for people with modest means and most people will be looking for some
direction from the finance minister to make housing more affordable. Predictably,
real estate companies have a ready recommendation-higher tax deduction for homeloans/interest
and less taxes for developers. While this would help in the smaller towns, the
demand supply dynamic in larger cities is such that it would give another
reason to builders to jack up property prices.
The Central Government's
role is also limited as housing is a state subject but the Finance Minister can
give some direction. HDFC Chairman, Mr Deepak Parekh has been pitching for
state level regulators for the sector for a long time. He feels that a
regulator would be able to monitor the affordable housing agenda, promote real
estate reforms and ensure transparency especially by mandating steps such as flats
being sold only on carpet area.
Mr. Girish Batra, Chairman and Managing Director of Netambit
is also pitching for a body like a Real Estate Regulatory Authority that could
regulate the real estate sector in the wake of recent corporate governance Issues.He expects that the housing sector growth would be a priority
to be provided interest rates relief through banks given the speculation and
outstretched prices that have dented sector sentiments this fiscal.
But prices are high because of the supply demand mismatch.
Big builders who have cornered most of the land in big cities like Mumbai and Delhi
are literally hoarding land which they are keeping for super-premium segments.
In Mumbai for instance, the state government and bodies like the MMRDA are sitting
on huge tracts of land and if the finance minister can make both these entities
to disgorge this land, the prices of property will surely fall.
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