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 | Housing needs to be decontrolled Our Correspondent A strange anomaly is emerging in the realty sector: there is a piled-up inventory and a huge demand in the market at the same time. In metropolitan cities, every second home built since 2007 remains unsold, according to a survey conducted by a leading real estate research agency. At the same time, there are millions of people in big cities are unable to own a house despite their best efforts. Out of the 8.21 lakh constructed in the last two years in the Mumbai Metropolitan Region (Mumbai, Thane and Navi Mumbai), National Capital Region (Delhi, Faridabad, Gurgaon, Noida, Greater Noida and Ghaziabad), Bangalore, Chennai, Hyderabad and Pune, only 3.86 lakh homes found buyers, says a survey by the Mumbai-based Liases Foras. The 53 per cent unsold inventory (4.35 lakh homes) translates into no takers for 50 crore sq ft of a total 94 crore sq ft of living space, Liases Foras CEO Pankaj Kapoor said. The glut is proving to be a scourge for realtors. Obviously, the lack of buyers is because of the high prices. The pinkish economists and experts will jump to the hackneyed phrases like ‘market failure’ and ‘unbridled greed’ of builders; they are also likely to suggest measures favouring bigger state role in the housing. Quite predictably, their remedy would be worse than the malady. For the malady is the consequence of policies adopted by the government of Jawaharlal Nehru half a century ago. In a recent interaction with the media, DLF chairman KP Singh narrated the story how his company came into being, how his father-in-law partnered with farmers in the villages surrounding Delhi. Singh said, “He had a smart idea of how to get farmers as partners in development,” Singh said. “DLF’s success story is also this, about not just buying land from farmers but taking them along as partners in progress. Which means, when we buy land, they put money with us as a tradition. First of every month, they are paid back with interest. Our people are there for their weddings or family problems, etc. It’s amazing how this rehabilitation is carried out… This is the story of DLF… His business was taken over as part of land nationalisation in 1958... DDA [Delhi Development Authority] came into the picture. We stopped, we didn’t go into unauthorised development.” But others did. The result: decades of chaotic urban housing, which not only forces millions of people to live in localities with minimal amenities but also creates shortages. One can only hope that whichever political configuration comes to power in the forthcoming elections is sensible enough to open up the realty sector so that state-induced distortions in the market are done away with. Posted on : 3/26/2009 Mail this article to your friend |