CHENNAI: Delay in getting statutory approvals, high cost of borrowing, shortage of skilled labour and lengthy process of land acquisition are holding up completion of many real estate projects, according to a survey. The Confederation of Real Estate Developers’ Associations of India-Jones Lang LaSalle Real Estate Transparency Survey 2011 said a majority of developers felt that streamlining the approval procedures in urban local bodies would benefit the industry immensely by saving both time and costs.
The survey also found out that borrowing has become expensive with banking institutions attributing a higher risk to the real estate sector. This, coupled with a slump in sales, is hurting the cash flow of developers.
It also blamed the National Rural Employment Guarantee Scheme for shortage of workers in the sector. “NREGS has been one of the reasons in the past two to three years for the reverse migration of workers from metropolitan cities to rural centres, creating a shortage of labour in the construction industry,” the survey said. The process of land purchase in cities is extremely lengthy and cumbersome for larger township projects as there are often multiple land owners, the survey observed.
It also felt that under the proposed bill on Land Acquisition, Rehabilitation and Resettlement (LARR), obtaining land through the “acquisition route” might result in higher costs due to provisions for higher compensation to be provided to displaced land owners.
However, this might also result in a lesser time of acquisition as land owners would be more willing to sell their properties, it observed.
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