The Hindu Business Line : Case for `unlocking' more lands

Demand and supply will dictate cost — the rule applies to real estate as much as to any other commodity. Make more of it available more easily and costs will come down, according to Mr Irfan Razack, Chairman, Estate South 2006, a summit that will look at the trends in South India's real estate.

Addressing a curtain raiser press conference here on Tuesday on the summit to be held between December 8 and 9 in Chennai, Mr Razack, who is also the Managing Director, Prestige Estates Project (P) Ltd, said that the demand for real estate and increasing land cost is spurred by investments at home and from abroad, bigger pay packets and low interest rates and tax incentives.

Change laws

Mr Razack said that if more land is `unlocked' for development by bringing appropriate changes to urban land ceiling laws, if the cascading effect of taxes — both the developer and the buyer pay stamp duty, apart from the levy of VAT or sales tax and service tax, all of which add about 30 per cent to the land cost — land cost could come down.

There are also a host of other challenges that need to be addressed to ease the situation. Archaic rent control regulations in urban clusters, lack of title insurance, opacity in enforcement of security rights, lack of a legitimised auction process, and complicated property tax and stamp duty structure that contribute to a high cost are just a few, he said.

The increased demand for office space is driven by the growing services sector. This, in turn, is spurring the demand for residential space, retail and hotel space. Local developers are expanding and improving corporate governance, property markets are increasingly getting organised, sub-urban and peripheral clusters are emerging.

The summit will highlight these trends and suggest solutions with speakers, including leading players in the domestic and international markets.

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