Patna: The resurgence of the realty sector after almost two years of lull looks imminent with the cabinet's approval to the Bihar Building Byelaws 2014.
Several big-budget projects put on hold following the suspension of clearance of plans would be back on track after the cabinet's clearance to the state's maiden building norms. Builders' bodies in the city claimed that investments to the tune of Rs 15,000- 20,000 crore in various real estate projects were stuck for the past two years.
Narendra Kumar, the director of real estate firm Kumar Buildcon Pvt. Ltd, was a delighted man on Wednesday. He would now be able to commence the construction work on his seven multi-storied building projects in the city. Their estimated project cost is around Rs 250 crore.
"I was eagerly waiting for the new building byelaws as I had made initial investments in my big-budget building projects. I could not start the work over the past two years because the building plans and maps were not being approved," said Narendra.
The ban (till the building byelaws was in place) on the approval of maps for any multi-storied building over the height of 11m was imposed in December 2012.
Like Narendra, hundreds of city developers welcomed the new building byelaws claiming that it would not only ensure smooth business for them but also contribute to the state's economic development.
In the words of economist Shaibal Gupta, the gross-domestic product (GDP) growth rate in Bihar has been primarily construction-centric over the past couple of years.
The state clocked 14.48 per cent growth in 2012-13, wherein the contribution of the construction sector turned out to be the highest at 21.05 per cent. Following the ban on the approval of maps, the real estate market virtually collapsed.
"The annual growth in the construction sector plummeted by more than 5 per cent in the 2013-14 fiscal because of the restriction on the real estate sector. The GDP also dropped by around 6 per cent in the same financial year," said Sachin Chandra, the state president of Builders' Association of India (BAI).
The construction sector includes development of roads, bridges and other infrastructure-related projects. But real estate and allied industries, including stone chips and cement, also play an important role in the sector.
"There has been a situation of standstill in the private real estate market over the past couple of months. If the developers come up with big projects after the clearance of the building byelaws, the economic growth rate would definitely increase," said Shaibal.
Patna Municipal commissioner Kuldip Narayan has called a meeting on December 6 to review the steps to be followed for approval of building plans and maps according to the Bihar Building Byelaws 2014. Bihar Municipal Competent Authority for Sanction of Building Plan Rules, 2014 states that the chief municipal officer (the municipal commissioner in Patna) is authorised to approve the building plans according to the provisions of the building byelaws.
Past casts shadow
Some developers claimed that the action taken by the Patna Municipal Corporation (PMC) against unauthorised construction activities in the city over the past few months had created a sense of suspicion in the mind of buyers.
"People are apprehensive about buying flats these days as they are not sure whether the apartment is under any litigation or not. Accordingly, it is difficult to foresee the demand for new flats that would be constructed after the notification of the byelaws," said Nanhey Kumar, a developer.
Similar were the views of BAI state president Chandra. "There are strong possibilities that buyers would prefer only their own trusted and established builders as there is an overall environment of suspicion regarding new apartments in the city. Thus, it would have to be seen whether new players would be able to reap the benefits of the new byelaws or not," said Chandra.
As far as property prices are concerned, builders claimed that it would stabilise and might even dip slightly.