BMC single-window clearance could drive down realty prices
Realtors expect BMC's 'single window' clearance to be a game changer,
leading to correction in property prices
leading to correction in property prices
BMC recently brought down the number of approvals builders need before starting construction from 119 to 58. This will also cut the time taken for getting approvals for a building project to 60 days against one-to-two years earlier.
According to Knight Frank Executive Director Gulam Zia, while regulatory uncertainties plague the entire Indian realty, it's always a make-or-break situation in Mumbai due to the high stakes involved. “Due to exorbitant land values already spent by developers, the cost of delay is ultimately passed on to buyers. So, if BMC can actually deliver on its promise of single-window clearance, with a time-bound approach, we can expect price correction in the overheated Mumbai market,” he told the Business Standard.
According to BMC officials, single-window clearance envisages, among other things, the use of self-certification by developers for approvals related to debris removal, property tax, and pest control.
Besides, processing of no-objection certificates (NOCs) will be initiated even before the application for permit is submitted. There will also be simultaneous issuance of intimation of disapproval and commencement certificate within 30 days from the receipt of proposal including site visit and approval of concessions, if any, from authorities.
Ramesh Nair, chief operating officer (business) and international director at JLL India, said if the reforms succeed in bringing down the costs involved in obtaining permits, the benefits could be passed on to consumers, making housing more affordable as well as boosting the absorption of real estate in the city.
"Earlier, a building construction proposal in Mumbai required a series of approvals from 30-35 different departments of the municipal corporation, the state government and various central government agencies. Under the new system, developers will require 58 certifications against 119 earlier, a reduction of 52 per cent in the number of approvals, NOCs and BMC remarks,'' he added.
Nahar Group Vice-Chairman Manju Yagnik said the benefits are manifold as this will reduce the time taken for getting clearances from various authorities. It will also result in faster completion of projects and quicker handover to the home buyer. For the industry, it will help root out any anomaly, which also adds up to the final cost of an apartment thus making the end product much cheaper for the home buyer.
"The end users are definitely going to benefit because as now the final cost to home buyer will be much lower. This is due to the fact that developers can complete their project and pay of the debts on loans taken much sooner," she added.
According to Kumar Urban Development spokesperson Kruti Jain, the smooth, easy approval process will have a direct impact on the cost of construction reduction and it will also reduce corruption. Developers will have some amount of money, which they can pass onto home buyers provided it's implemented to full potential. "The online procedure for approvals has nearly half of the original approvals and is savvier to navigate through. All these factors will reduce the price of homes significantly as it originally used to take up approximately 36% of the cost of construction. Lower costs will boost demand and keep the real estate market vibrant,'' she opined.
- by Sanjay Jog
Source :- Business Standard
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