Most of the housing stock this year was bought by investors, depriving potential purchasers truly in need of accommodation.
Not finding your dream affordable house? Well, according to Liases Foras, a non-brokerage real estate research firm based out of Mumbai, most of the housing stock this year was bought by investors, depriving potential purchasers truly in need of accommodation.
In 2008, nearly 45 % of investors had bought houses; this slipped to 22 % in 2009, and then shot up again to 43% in 2010 and 52% in 2011 - the highest in the past several years.
“All the affordable housing schemes have been plagued with investors,” said Pankaj Kapoor, managing director of Liases Foras. “Several buildings in the Mumbai Metropolitan Region are lying vacant. On the other hand, needy people are living on the roads, and sometimes in slums. The investors have ruined the present real estate market.”
“Excessive capital is creating ripples in the housing industry,” he added. “As per the logical current market circle, the capital pushes the prices of land up, and subsequently property prices push consumers away, while investors with surplus money are roped in to sustain and inflate the market. The government need to break this well-planned circle to bring down the present exorbitant housing prices.”
Subsequently, controversial FSI policies are framed to turn projects viable - advantageous to a few, but creating urban imbalance on the whole.
“The government auctions off the land at exorbitant prices, and at the same time, expects the developer to make cheap and affordable houses,” said Paras Gundecha, president of Maharashtra Chamber of Housing Industry.
Real estate experts say that regional property purchase policies need to be implemented strictly, and local residents should be banned from further owning more than one house.
“Additional tax should be levied in cities with high prices. Lending for third or more home purchases should be strictly restricted,” said Kapoor He added that in India, the income tax exemption for the first-property buyer is limited to Rs 1,50,000 on home loan interest, while to investors buying their second or third property, the entire interest amount has been exempted.
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