The
Secretary, Department of Industrial Policy and Promotion (DIPP) did not explain how soon
development of innovative methods of constructing low cost
housing would become a reality but he said that the next
Nano could very possibly happen in realty.
Technological
innovationmay enable developers to make low cost housingfinancially
feasible. The DIPP handles the matters pertaining to the granting of
patents. It could however not be verifiedif anyleading developer filed patent applications on building-innovation.
As developers are
being increasingly compelled by the government to set aside a part of
houses for the low income group it's to be expected that certain realty
players may resort to technological innovation for building homes at a very low
cost so that they can obtain a profit at the same time. There is also a possibility ofobtaining subsidized land for low cost housing according to a governmentofficial.
This means that the next
N ano in India could be an affordable home. Some realty players are near to
developing innovative ways of building parts of a building in large volumes and
transferring those to the real sites. Constructioncosts could be
meaningfully lowered by this and that will make it possible for builders to
venture into commercially feasible low-cost housing. An executive of
Cushman & Wakefield says that as 70-80% of the demand for housing comes
from more will come down, government should roll back taxes"
Singh said.
He thinks banks need to
lower their mortgage rate for demand to pick up in this sector."Housing and constructionsectors are key sectors for revival of economy and the industry needs morefunds," he
said.
If this industry does not
revive then there could be a cascading effect on a lot of industries and it
will have a negative impact on the economy. While admittingthat demand
is much less than supply, Singh said that there can be layoffs in the
future if the situation continues middle to lower segment
and this segment is important. Because of the economic slump
developers are compelled to consider this segment as it has now
become tough going for luxury products. Technologicalinnovation alone
will not be sufficient and developers have to
apply themselves to other areas so that affordable
housing becomes financially workable.
Singh said that
demand drives prices. He said that this is a free economy and if
demand falls price of property will automatically come down. Singh
said he does not think that real estate prices have been over priced at
any point of time.
He said it has
increased gradually like any other sector and hence
it needs incentive from the government to bring down prices. He also
said the company had deferred some of its projects due to
poor demand."In hotels, residential
and commercial everywhere deferred because of lower
demand and liquidity crisis," he said
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