The National Real Estate Development Council (NAREDCO) has urged the Union Government to consider a rental housing policy as well as national and state master plans for the construction and real estate sector. The twin purposes would enable India to smoothly move in the growth trajectory of construction sector as those who cannot afford to build their own houses can live in such units for good. Kaushal Kishore, Minister of State for Housing and Urban Affairs and Manoj Joshi, Secretary, Ministry of Housing and Urban Affairs attended the two-day 16th NAREDCO National Convention with the theme ‘Fostering Trust With Transparency; Pathways 2047.’ The convention witnessed the signing of Memoranda of Association with concerned stakeholders and various wings of government and NAREDCO in multiple ways so that the desired objectives of the housing sector are achieved as intended.
Addressing the convention, Sanjay Kulshrestha, Chairman, Housing & Urban Development Corporation (HUDCO), expressed optimism that, in view of the growing resurgence that the real estate sector is experiencing post-COVID crisis, the corporation is likely to consider financing real estate corporates in the private regime beginning next year. Currently, the corporation does not undertake, as per its prevailing mandate, corporate financing in the private sector for the real estate and housing sector, and its activities are largely confined to the government and government-owned utilities. He pointed out that the housing and real estate sector, including infrastructure, are accorded special preferences and treatment in the budget, particularly in 2023-24. This could be one of the reasons that the corporation might undertake financing real estate activities.
Kaushal Kishore, Minister of State for Housing and Urban Affairs |
The HUDCO Chairman indicated that the housing development corporation would make necessary consultations with the authorities concerned so that it becomes feasible for the corporation to be permitted to go in for private sector financing, given the scope and diverse opportunities that the housing and affordable housing sector provides.
Earlier, the Joint Secretary of Housing and Urban Affairs emphasised the issue of rental housing and was of the opinion that EMI payments for housing units should ideally stay at 30 percent of what is earned by the unit seeker for affordable housing because it is a sort of acceptable thumb rule all over the world. In this context, the case of rental housing and affordable rental housing becomes a case study for which NAREDCO is requested to look into.
G. Hari Babu, President, NAREDCO, made an exhaustive and comprehensive presentation. He explained that India critically needs the All-India master plans and state plans to develop green field cities by the time it grows into 30 trillion dollar economy by 2047 and even earlier as that would be the primary requirement of Indian real estate and construction industry for the growth of the country.
Presently, on account of legitimate and useful urban planning, India has moved a little in terms of the growth of the cities and this makes critical for India to have the proposed master plans so that proper development is ensured for urban India as this would be the centre for growth. It may be mentioned here that with each passing day, urban India is constricted with influx of migration from rural India and it becomes all the more important that such master plans are put in place as are required for suitable growth of all metros, he concluded.
Dr Niranjan Hiranandani, Chairman, NAREDCO, held that in a developed country like the USA, the rental housing policy is so successful that 50% of its populace prefers to live in such utilities. If India begins preparation to adopt such a model it would be economic as well as prudent because those that cannot afford their own housing units can sustain their livings in rented properties.
Dr. Hiranandani informed that NAREDCO has already mooted this idea with the Minister of Housing and Urban Affairs some time ago. Both the Chairman and President of NAREDCO also stressed that in the proposed rental housing policy, those institution can contribute to fructify the proposal could include centre and state governments and most of financial institutions including RBI.
The NAREDCO also said that the interest rates for the housing and affordable housing projects should come down from the existing 8-9% to 6-6.5% as would happen a couple of years ago to boost housing activities. The interest rates have shot up due to multiple factors and if housing sector has to register a growth as being visualised by the current government reduction in interest rates would be the primary requirement.
