D.S.Tripathy, Joint Secretary Credai National
BHUBANESWAR: The real estate sector in Orissa is passing through a sluggish phase, as demand is less, and so is money circulation. Besides, real estate's association with shady chit fund companies has resulted in a trust-deficit among customers. D S Tripathy, national joint secretary of the confederation of real estate developers' association of India (CREDAI), shares his thoughts about the present problems, the possibilities, and challenges ahead.As told to Raghunath Panigrahi.
What is your assessment of the real estate market in the state now and its future?
At present, the marker is stagnant because of over-supply of houses in the high-end category and lack of potential customers. However, the houses or flats within the range of Rs 201akh to Rs 25 lakh are not available in sufficient numbers. This is what is sought after by about 80 per cent of the home buyers. New developers are coming up with projects within this range but they need proper support from the state government by way of providing land.
Real estate has earned a bad name in recent months because it took money from shady chit fund companies. Several projects have thus been stopped now, and customers feel being cheated.
There are certain unscrupulous players in the market. I must"admit it. They are there only to make money and they do not have any intention to deliver projects to customers. Besides chit fund companies are also promising big and lucrative projects but have not started any. As far as CREDAI is concerned, we have no information that chit fund companies have invested their funds with our members. In such cases, buyers have to be cautious while investing their hard-earned money. Rather than going in for lucrative offers, they should check the credentials and past track-record of the developers before they put their money in. This is very important.
What self-regulation does CREDAI have to protect the interests of the customers?
We have our grievance redressal forum to deal with companies from customers. In fact the forum has taken several decision favouring buyers, which has improved the credibility of our society. However, in cases where developers made a verbal commitment, and there was no written word, it is difficultto establish the truth, If there is a written agreement, it is easy to safeguard the interest of the buyers.
The Centre is coming up with a customer-friendly real estate regulation bill. How will it make a difference?
It will definitely being transparency to the real estate sector. But we have to see way it is being implemented. However, as it prevents diversion of funds, developers have to mobilize their own resources for projects and thus their financial burden will increase. Besides this, because of delay in getting approval from various agencies, project cost increases. The bill must fix accountability of the approval authority and ensure project completion on time to make houses affordable to all sections of the society. Apart from this, the bill needs to address the issue of finance by banks which sponsor projects if the market is stable and withdraw midway if the market becomes volatile.
What are the problems in getting approval from the authorities?
As of now, we have to run from pillar to post for getting clearances; and that even takes years. So we are in favour of a single-window approval system as it will help in timely completion of projects and reduce construction cost. This will make houses affordable for the ever-increasing urban population.
There is criticism about the land allotment policy of the state government in the capital, in particular. How do you see this?
The government is giving us low-lying lands east of the railway lines near Sunderpada and adjoining areas where most plots are private lands sans adequate accessibility. However, the highlands are located near the Khandagiri areas where 85 to 90 per cent of the land is government-owned. Customers are forced to buy homes developed in low-lying areas are prone to flooding. It is high time the government formulated a proper land allotment policy.