A common man has a common dream – buying a house. It remains only a dream for majority of population in metro cities.
There are various factors which have impact on pricing of houses. Some are specific to a particular city while some are universal. For eg. in case of Mumbai, there are natural restrictions. It is surrounded by water on three sides, hence instead of circular expansion which is usual pattern, it can be expanded only in linear direction – from island city at South towards suburbs on north side. This has limited land available for development in the city. It is further reduced due to presence of ecologically sensitive areas such as Sanjay Gandhi national park, salt pans etc. within the city, resulting into more vertical development with increased cost of construction & ultimately increasing real estate prices.
Generally in metro cities, land cost is high & cost of capital is high. On top of that, Developer has to pay hefty premiums for proposed Development to local authority & State Govt in form of Development charges, charges for additional FSI if any, fire premiums, open space deficiency etc. The cost of these premiums is to the tune of 12-18% of Sale price in Mumbai region. All this incurred cost is transferred to the buyer. Thereafter, during Sale of a house, price increases further by approx. 19% (as in Mumbai region) due to GST, stamp duty & registration. In a way, instead of treating housing as a basic need, it is being treated by local authorities as well as Govt as a major source of revenue, hurting the end user.
Apart from financial aspects, there are other factors affecting availability of housing – instances where Developer has not finished the project, instead diverting the money received from buyers to start new project. Sometimes projects are delayed due to inevitable reasons such as changes in Govt policies / regulations, shortage of materials etc.
The biggest contributor to the price increase is Govt (Central, State & local body), followed by Land owner & then the Developer___ alas at the cost of buyer.
Whatever the reason – shortage or increased price of houses, at the receiving end is a common man, who has to invest most of his lifelong savings for fulfilling basic necessity of house & still it remains a Dream … miles away.…
