But the impact has been less severe on the real estate sector in Mysuru, where there is growing interest in self-catering accommodation.
Experts who follow the real estate market say the situation may vary from region to region, but the industry as a whole is going through a period of adjustment and needs government support in terms of clarity of rules and regulation. less regulatory pressure.
According to DB Mehta, CMD of Allegro Ventures India in Mangaluru, the industry has had to constantly adapt over the past five years due to major events, demonetization, the rollout of GST and the economic downturn to the pandemic. The year 2020-2021 has been particularly difficult: the demand for housing has collapsed by 50% and the value by 10 to 15%.
âThe offer has been severely affected. The prices of sand, aggregates and concrete blocks have risen sharply and only 50 percent of migrant construction workers have returned from their villages, âhe added. The decline in economic activity in the Gulf countries has also affected the market in coastal districts, in particular Dakshina Kannada. NRIs are a large group of real estate investors.
Naveen Cardoza, managing director of Marian Projects Pvt Ltd, said new projects would likely be expensive as developers would have to factor in GST, high material costs and increased statutory fees. Land and construction costs have increased by Rs 400-500 per square foot over the past 18 months.
In Dharwad, real estate sales slowed in all segments – low, middle and high income groups and luxury categories. Builder Ravi N Deshpande claimed new projects were not being announced due to government-imposed height restriction for skyscrapers and delayed approvals by property regulator RERA. “People who want funding don’t get it from banks for lack of RERA registration,” he added.
Another builder from Dharwad said there should be a one-stop-shop for obtaining permits. âCurrently, we have to approach 17 departments to get permission for high-rise buildings. We pay high fees and huge fines for small infractions. Even after you’ve passed everything, the certificate of completion takes at least six months, âhe said.
In Mysuru, things are slightly better. Although site and apartment prices have stagnated over the past year and the pace of construction is slow, various infrastructure and investment proposals have kept developers optimistic. Nagesh ML, CEO of AMACS India, said the trend has been to move from just parking money in real estate to owning sites ready to build.
âRents have increased by 10%. The best option is to build your own house, âsaid Rajashekhar UB, a resident of Mysuru. Builders say the biggest challenge is getting a skilled workforce. âMany of the skilled workers who left town have not yet returned,â developer Divakar SP said.