The real estate sector in India is going through a dimly lit corridor. The woes of the residential segment will increase in 2018.
Subsequently, we’ve highlighted the concerns faced by real estate developers in Bangalore.
Risk of default:
The final handover of a house to the buyers has become a big issue. The builderswho stick to their commitment are performing much better than the others. A delay in completing the projectsin a stipulated timeframe leads to less demand. The banks are apprehensive to grant loans to the builders as they have failed to pay previous loans.
Moreover, several trials have been charged against the creditors, developers.Since funds have been stopped; investors are facing a logjam in construction.
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Delay in obtaining sanctions:
The government corporations have not taken the needed steps to propel growth in the private sector. Developers consume a lot of time to attain information of disapproval, occupation certificate or completion certificate. All this increases the cost of the projects.
Single window clearance scheme:
Real estate developers face issues in regards to property clearance. The specialists consume a lot of time to get approvals from specialists, who take time to answer. Developers face an issue with single clearance. Overall, it takes time to implement the task.
Manpower and technology hiccups:
Today, the housing sector is the second largest employment generator in India. Despite being the second largest employer, India faces a shortage in manpower. This sector is reliant on manual labour and faces delay in project completion, leading to supply getting deferred.
To address all concerns, various techniques of construction should be executed on a large scale and holistic training needs to be given. Moreover, construction equipment’s and certain skills should be offered at affordable rates.
Lack of visibility:
The lack of visibility hinders the Indian real estate. For example, lack of regulation andland encroachment are an obstacle to foreign investors, who wish toinvest in the Indian real estate.
Dearth in skill requirement:
The shortage of talent in the construction sector is a hurdle facing the Indian real sector. The education and training offered through various schemes are not up to the mark for the unskilled workforce. That said, shortage of skilled professionalshave begun to impact the real estate developers in Bangalore.
Statutory fees and taxes:
The high rates of statutory fees coupled with taxation increases the cost of construction, making economically housing projects financially unattainable for the private sector developers, according to KPMG.