Election code of conduct hits realty firms
Mar 13, 2014
Source : The Economic Times


DELHI: Real estate developers say they are facing cost escalation on several residential projects across cities as officials are holding back routine approvals citing the election code of conduct.

They said work has particularly been affected in Mumbai, Bangalore, Pune, Noida, Ghaziabad and Gurgaon as officials lack clarity on how to deal with routine matters such as building approvals. Deployment of officers for poll duties has also added to the delays, they said. "Approvals have slowed down in the last one month in Noida and Ghaziabad. There seems to be some fear in the minds of officers," said RK Arora, managing director of Noida-based developer Supertech.

In Gurgaon and Faridabad, which come under the National Capital Region (NCR), nearly 50 residential projects of developers such as Supertech and Assotech have been stalled after the Punjab and Haryana high court prohibited grant of licences until the NCR Planning Board clears the sub-regional plan for these regions. The board was due to meet on March 6 but the meeting did not take place as the Election Commission announced the general election schedule a day before. The model code of conduct comes into force immediately on the declaration of poll dates.

"During election months, at least routine approvals should be given," said Sanjeev Srivastava, managing director of Assotech Developers. He said one of their projects in Faridabad has been stalled even though approvals for it were at an advanced stage. "This is not a new proposal, so should not be affected by the code of conduct." Naini Jayaseelan, member-secretary of the NCR Planning Board, said the board has written to the commission to allow it to hold a meeting to clear the sub-regional plan.

"It is a safe thing to do. It is a most non-controversial thing to do for a bureaucrat. Unfortunately, in a democracy, inaction is never a cause for punishment," said Anckur Srivasttava, chairman of GenReal Property Advisers.

Developers say a two-month delay in getting approvals will mean cost escalation of 5-6% for a project, which is a burden in these troubled times. "Approval process becomes slow around election time, which is not good for the industry. It puts an added cost burden," said JC Sharma, managing director of Sobha DevelopersBSE 0.71 %. Home sales across the country have been slow for the last 12 to 18 months and inventory levels have risen. According to data from property research firm Liases Foras, unsold inventory stood at 709 million square feet (650,000 homes) in the quarter to December. At the current pace of sales, this inventory will require at least 30 months to be sold. Across cities, investors who bought multiple homes in the past are staying away from the market now, as they are unable to exit their previous investments. Home buyers have been shying away from buying homes because of the uncertainty in the job market and the economy in general.

Lalit Kumar Jain, chairman, Confederation of Real Estate Developers Association of India (Credai), said many officials are put on elections duties, which means they are not available for their normal duties. "Even if one official is missing from the whole chain, the entire approval process gets derailed," he said. Jain said in Maharashtra, many files of large realty projects, routinely go to the chief minister's office.





Latest Realty News

Homi Bhabha's bungalow put on the block, priced at Rs 257 crore
Mar 13, 2014
MUMBAI: The iconic bungalow where Dr. Homi J Bhabha, father of India's atomic energy programme lived for years, has now been formally put on block. The reserve price for the property, which had been home to the illustrious Bhabha family including Dr. Homi Bhabha and Dr. Jamshed Bhabha, is set at Rs 257 crore.
JLL fortifies leadership in Delhi NCR, Chennai
Mar 12, 2014
GURGAON:: International property consultancy JLL (Jones Lang LaSalle) has announced a major realignment in the leadership team for its Delhi NCR and Chennai businesses. The move will further strengthen the company’s position with regards to its established businesses in Delhi NCR and South India.
Prime real estate hubs in Delhi-NCR
Mar 12, 2014
DELHI: The attractiveness of real estate in recent years as an asset class has been further augmented owing to increasing demand for more and better-quality housing, additional office space requirement owing to expansion and consolidation by several corporates, and the advent of modern retail formats.
Sohna Road: An attractive residential destination
Mar 12, 2014
DELHI: With a large number of residential projects completed or nearing completion, and many office complexes already occupied by leading companies, Sohna Road in Gurgaon has emerged as an attractive residential destination for end users and long term investors.
Real estate may perk up post polls
Mar 12, 2014
DELHI: Hit by slowing economic growth, rising borrowing costs, and high property prices, demand in the realty sector remained subdued in 2013—particularly in the housing segment—resulting in sales slowdown and pressure on asset pricing across leading cities. Experts say the current cautious market sentiment is likely to continue, as headwinds to growth will prevail at least until the first half of 2014.
Hospitality: A lucrative zone for realty growth in Gujarat
Mar 12, 2014
AHMEDABAD: Statistics show that Gujarat witnessed 6 per cent growth in property prices in last one year and the property price index in the state remained volatile. However, what the statistics does not reveal is the fact that during the same period, many of the cities that National Housing Bank’s Residex tracked down, did witness either no change or downward change.
Subrata Roy sent to jail, courtesy the mysterious Mr Roshan Lal
Mar 12, 2014
DELHI: In the Sahara group's Subrata Roy case, the angle of political or corporate rivalry behind the case has always existed.
Sahara companies gave each other Rs 16,000 crore in cash
Mar 12, 2014
DELHI: Asked by the Supreme Court to give bank transaction details of Rs 20,000-odd crore they claimed to have refunded to investors, Sahara group companies on Tuesday said they had transferred cash from one company to the other and had not resorted to banking instruments.
SC body for probe into Kulwant's land deals
Mar 12, 2014
CHANDIGARH: National Scheduled Castes Alliance (NSCA) president Paramjit Saingh Kainth on Tuesday demanded a commission of inquiry to probe the alleged nexus between politicians and real estate entrepreneurs in Punjab, especially to probe the growth of realtor Kulwant Singh as a candidate of the ruling Shiromani Akali Dal (SAD) in the Lok Sabha elections.
Real-estate companies' ponzi scam worth over Rs 45,000 crore: CBI
Mar 12, 2014
DELHI: CBI claimed the documents recovered by it during searches at the premises of Delhi-based business groups PACL and PGF show they allegedly used ponzi scheme to cheat nearly five crore investors of Rs 45,0000 crore.

Latest Realty News Of State

Realty Talk's