Builders foresee soaring profits

MUMBAI, May 13: The real estate industry is jubilant. With the repeal of the Urban Land Ceiling and Regulation Act ULCRA builders and de...

MUMBAI, May 13: The real estate industry is jubilant. With the repeal of the Urban Land Ceiling and Regulation Act ULCRA builders and developers hope that the crashed profit margins will rise as demand for housing picks up.

The Mumbai-based builders are awaiting for the equation to change from high-price recession hit market to low price and high volumes. quot;The prices are bound to fall in all the metros as more land would be released for development. Consequently, demand for housing loans would shoot up,quot; says GIC HF CEO, Vijay Joshi.

quot;The repeal of ULCRA is a death blow to all those speculators who had bought land and apartments at very high prices and that too at a high interest rates during the 1992-94 boom,quot; adds Joshi.

quot;The business of all housing finance companies would go up as demand for loans will pick up as consumers would like to take advantage of the lower prices,quot; he said.

quot;I am thrilled,quot; said construction tycoon Niranjan Hiranandani on the repeal of ULCRA. quot;We need combination ofmore steps to really tackle the problem of sagging real estate industry. I hope in the forthcoming National Housing Policy NHP the government will look into other problems,quot; he added. quot;Now the ball is in the state government8217;s court to reduce the agony of the common man,quot; says Hiranandani. quot;Maharashtra must take steps like cutting stamp duty, registration charges etc. This would help create surplus in the housing sector as in the case of other industries like automobiles and aviation,quot; he adds.

quot;The ULCRA had frozen the land market, pushed up land prices, generated corruption and in fact failed to achieve the social purposes on the Act. It is sad that it took the government 22 years to wake up to the ground realities,quot; said a HDFC official.

With an investment of over Rs 1,00,000 crore required for the housing sector in urban and rural areas, the industry is now seeking the quot;infrastructurequot; status to attract more funds. quot;I think the fiscal benefits advanced to the infrastructure sector should be passedon to the housing sector too, so that the industry can take the benefit of Section 80-1A of the IT act,quot; according to Hiranandani.

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All eyes are now set on the new NHP expected to be announced by the Union government in the next few days. Experts feel the new policy would help clear a backlog of over 233 lakh dwelling units expected in a 20-year span and 638 lakh new dwellings to meet the incremental housing needs of the growing population. The new NHP would aim at providing adequate housing at reduced prices, say experts.

Also, in order to revive the industry, funds from a wider range of investors would be invited.