Despite strong growth potential for real estate in Tamil Nadu, the price per square foot is set to rise in the next two three months as the industry is reeling under a crisis, including high input costs, a top industry official has said.
“If the situation continues for the next two-three months, there is no other option than to increase the price per square foot by Rs.150-Rs.200 to manage this challenge. This is despite good growth prospects and a good long-term forecast,” Confederation of Real Estate Developers Association of India (CREDAI) National Secretary T Chitty Babu said.
Stating that severe input costs is a major constraint, Babu, also CREDAI Tamil Nadu unit President, said the industry was facing acute labour shortage. Besides, cement price per bag at Rs.280kg per bag was the highest in India, compared to states like Gujarat, Karnataka, where it was around Rs.200 and Rs.225 per bag respectively.
Demanding a “single window clearance” for speedy processing of approvals for projects, he said there are now 676 files waiting clearance by government agencies.
“If the situation persists, then there will be Rs.1500 crore revenue loss.” “The overall estimated real estate projects (in India) are 27.5 million square feet, of which Tamil Nadu constitutes 10 per cent”, he said. He also demanded that all files be processed faster for any real-estate development.
“In Karnataka it was recently modified to 15 days. But in Tamil Nadu it takes months. We need it to be done in 15 days with more transparency”, he said. It is because of this situation that the real estate industry in Tamil Nadu is losing many good housing projects to other states, he said.
