The real estate industry in Telangana is currently facing a significant downturn, suffering from a combination of issues that have severely impacted market activity. On one hand, consumer interest in purchasing properties has waned, while on the other, government inaction has compounded the challenges faced by builders and developers. Despite repeated appeals and detailed reports from industry leaders, no significant steps have been taken to address the critical concerns, leaving the sector in a precarious situation.
Consumer Sentiment in Decline
Consumer sentiment has remained sluggish, with fewer individuals showing interest in purchasing homes or investing in new real estate developments. The reasons for this are multifaceted. Economic uncertainties, rising interest rates, and an overall lack of confidence in the market have all contributed to a noticeable decline in property sales. As a result, a once thriving real estate sector that performed well up until last year has been experiencing a concerning slowdown.
Builders and Developers Raise Concerns
Organizations like the Confederation of Real Estate Developers Association of India (CREDAI) Telangana have voiced their frustration over the issues plaguing the real estate market. In August, CREDAI submitted a comprehensive list of issues and suggestions to the government, aiming to revitalize the sector. Unfortunately, little progress has been made. One of the primary concerns raised was the delay in granting approvals for layouts, particularly in district regions.
Delays in Approvals Slowing Down the Market
According to CREDAI, district-level approval processes for real estate projects are significantly delayed. The responsibility for approving layouts lies with district Collectors. However, due to their busy schedules, this task is often deprioritized, leading to further delays in project timelines. This has been a major point of contention for developers who are already struggling to meet consumer demand in a slowing market.
Bureaucratic Red Tape and NOC Requirements
In addition to delays caused by scheduling issues, builders and developers must also navigate a complex bureaucratic system. When applying for layout approvals, developers are required to attach No Objection Certificates (NOCs) from various departments, including revenue, irrigation, panchayatraj, and Roads and Buildings (R&B). Even when all necessary documents are provided, officials frequently demand additional NOCs from these departments, creating even more delays. This bureaucratic red tape has further hindered progress in the real estate sector, causing frustration among developers and potential investors alike.
The Need for Incentives for Affordable Housing Projects
Another pressing issue that CREDAI highlighted is the lack of incentives for affordable housing projects in Telangana. The central government currently offers a 1% GST rate on affordable housing projects and provides interest subsidies on loans under the Pradhan Mantri Awas Yojana (PMAY). In addition, builders receive income tax exemptions on their total project under this scheme. CREDAI believes that if the Telangana government were to emulate these incentives, it could help revive interest in the affordable housing market and potentially boost overall real estate activity.
CREDAI also suggested reducing the stamp duty for affordable housing projects to make homeownership more accessible for the average citizen. Implementing such measures could create a more favorable environment for both developers and buyers, stimulating growth in a sector that is currently facing a downturn.
The New Master Plan: A Potential Solution?
Adding to the complexity of the situation is the anticipation of a new master plan for the state’s urban and rural development. While the details of the plan are still under discussion, there is hope that it could address some of the issues stifling growth in the real estate sector. However, with no concrete timeline for its release, developers remain uncertain about how it will impact their ongoing projects.
Conclusion: A Sector in Need of Immediate Attention
The real estate sector in Telangana is at a crossroads. With declining consumer interest, approval delays, bureaucratic hurdles, and a lack of incentives, the once booming market is now grappling with a range of challenges. While organizations like CREDAI continue to push for reforms and incentives, the onus is on the state government to take immediate action to prevent further decline. Addressing these concerns promptly could not only revive the sector but also ensure long-term sustainability for both developers and homebuyers.
Without swift intervention, the real estate market in Telangana may continue to stagnate, leaving behind a trail of unfulfilled projects and frustrated stakeholders.
