In line with its commitment on providing affordable housing to economically weaker sections and low income groups as outlined in the Budget presented in July this year, the Karnataka government will come out with its policy on affordable housing in October this year.

The Chief Secretary to the government of Karnataka, S V Ranganath said this at the Ficci conference on real estate on Thursday here. He also said, “Affordable housing measuring 600 to 700 sq ft in the range of Rs 6 to 7 lakh is a big challenge.”

He acknowledged the challenges faced by developers in acquiring land, citing the plethora of clearances. “Permission to start a housing project involves at least about 20 clearances from various government bodies, leading to delays and rise in costs.” He added that methodologies should be evolved to secure clearances simultaneously to expedite housing projects to reduce costs and time, more so as the pace of urbanisation is faster in smaller cities than in metropolitan areas. He asked real estate companies to ensure transparency in financial matters, to enable more private equity investors to invest in the sector.

Rising inventory

The CMD of Housing and Urban Development Corporation (Hudco), V P Baligar said that the slowdown in the real estate sector was evident from the fact that flats remain unsold (on an average) for 48 months in Mumbai, 25 months in Bangalore and 23 months in New Delhi.

He also said that urbanisation in South India at 41.2 per cent, higher than the all-India average of 31.2 per cent, poses more challenges and opportunities for the real estate sector and its financiers. At the same time, he cited the low level of mortgage penetration (mortage to GDP ratio) in India at 9 per cent (as of FY ’12) and shortage of houses in urban areas.