Pune Residential Property Prices Increased by Rs 300 per sqft

News Posted - 2010-05-07

The residential property costs in city has increased by Rs 250-300 per square feet in last couple of months, builders and developers body Confederation of Real Estate Developers ‘ Associations of India (CREDAI) Pune has said. “With increase in government and municipal charges getting rolled out in the form of VAT, Service Tax, Ready Reckoner Rates, increase in stamp duty, VAT on materials — all combined, we see an increase of residential property rates by Rs 250-300 per sqft,” president of CREDAI, Pune, Satish Magar told reporters.

According to him, realty developers pay different types of taxes under various heads, including stamp duty on land cost, and increase in taxes will only put extra burden on consumers. “At least 40 per cent of the total cost share is of municipal charges alone. If these are not enough, we are troubled with the shortage of land. Without adequate land bank in city premises, it is difficult to get new projects in shape as majority of the people want to live near the city,” Magar said.

CREDAI Pune vice-president Rohit Gera said that during the recession, all under-construction projects were stalled as there were no buyers. But the situation has changed in the last four months. “The markets have recovered, people are getting salary hikes and job confidence is back. This has led to a surge in property demand. But the supply does not match the demand in any way. Our observation shows that increase in costs by one per cent would require salary hike by seven per cent to afford housing costs today,” Gera said.

Senior Vice President, CREDAI Hemant Naiknavare insisted upon early announcement of the city Development Plan for better planning of projects. “Due to delay in release of city’s DP, we are not able to ascertain the exact area available for development following the mandatory reservations. This would help in planning our projects as we know the exactly how much area is available with us for construction,” he said. Touching on DP, Magar said that the delay in release of city DP and lack of policing outside city limits was encouraging some of the developers to build unauthorised constructions.

“These issues have made us worried. We don’t think it is any pleasure doing business with escalated costs. Any increase in price would adversely impact our sales. We are at loss,” Naiknavare said.

Source: Indianrealtynews 6/5/10