Lower tax rates will cut prices: industry

Lower tax rates will cut prices: industry
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First Published: Sun, Mar 28 2010. 11 49 PM IST
Updated: Sun, Mar 28 2010. 11 49 PM IST
Mumbai: They have a vision of high-speed trains and new-age Metros ferrying people to offices in soaring structures, and back home to plush flats on the outer edges of Mumbai; of single-window clearances and a transparent system that will help them build better, faster, greener.
They hope for more vertical development rights and lower taxation, which will bring unrealistic real estate rates down even as more people see the benefits of moving further from a choking city.
Nine panellists representing various stakeholders in the real estate industry—government, builders, development experts and the media—took part in the Hindustan Times Real Estate Conclave at the Trident, Bandra-Kurla Complex, on Friday.
Even in a city as close as Hyderabad, said developer Abhisheck Lodha, there is no tweaking of rules. “Rules are very transparent and the government helps developers provide houses for the masses. This is not the case here,” he said.
Agreeing on the need for better connectivity, especially super-fast trains and better road transport, Maharashtra minister of state for housing Sachin Ahir promised action.
“We are based on an island and expansion is a big problem,” he said. “We are planning to set up more satellite townships in places like Mandwa, Nhava Seva and Mira-Bhayander.”
Congress legislator and housing board member Krishna Hegde said Maharashtra Housing and Area Development Authority, or Mhada, was open to private partnerships to build more affordable houses.
“In five years, the government plans to construct 10 lakh affordable houses in Maharashtra,” he said. “Of those, two lakh will be in Mumbai.”
Builders stressed the need for the government, buyers and developers to work together to overhaul urban planning rules, tax structures and clearance procedures to make homes more affordable to more Mumbai residents.
“Right now, these stakeholders are at loggerheads,” said Lodha. “The rules are such that some cut corners (to) make a profit.”
The city needs 200,000 new homes a year, Lodha added, but only a fraction of this is being built. Last year, only 19,000 new homes were put on the market.
With very little open land left in the city itself, coastal norms that prevent any more reclamation and one of the lowest floor space indices in the world, prices are bound to go up, the panellists agreed.
“Seven-storeyd buildings should be made into 40 storeys,” said Sunil Mantri, chairman and managing director of Sunil Mantri Realty Ltd. “This is only way to utilize space to the maximum.”
For Boman Irani, chairman and managing director of Rustomjee Builders, the root of the problem was the government’s treatment of the real estate sector. “Here, the farmer is treated like a king and even the textile industry gets loans at 9% interest, but nothing is done for us,” he said. “Our industry is the most over-regulated.”
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First Published: Sun, Mar 28 2010. 11 49 PM IST