If building industry giants and housing experts are on point, the raft of measures unveiled by the state government to revive the real estate industry will bring down the overall cost of construction of buildings in the country’s high rise capital by 20 per cent.
While builders have welcomed the move, housing activists, however, remain sceptical on whether end-users will benefit from the unveiled measures.
Mumbai, the most expensive real estate market in India, has been bleeding from a slowdown, with unsold inventories piling up.
Ramesh Prabhu, a noted housing activist, said the government’s move was good as it would ease the liquidity freeze that the builders are facing, but he cited past experiences to contend that there were doubts on whether the builders would in turn pass on the benefits to the flat buyers.
“The government had earlier stayed a hike in the Ready Reckoner rates citing similar grounds. But the retail prices of apartments did not come down,” Prabhu said.
Niranjan Hiranandani, who heads the National Real Estate Development Council, which has been pushing for the stimulus, however, argued that the “competitive nature” of the real estate market will ensure that the end-users benefit from it. Terming the move as the need of the hour, he claimed that it would encourage builders to take up new projects, resulting in an increase in the housing stock.
Mayur Shah, Managing Director, Marathon Group, also a past president of the Maharashtra Chamber of Housing Industry, said that the industry had been demanding these concessions for a very long time. “The government has finally taken a call on these. This will definitely boost the real estate market,” he said.
Echoing Hiranandani, Shah said, “Homebuyers drive the real estate market. These initiatives will reduce the overall project cost, and the benefits will definitely reach the end-user.”
He also claimed that the fiscal incentives being offered to promote the construction of specialised commercial projects would also lead to the creation of new office space in the commercial capital.