The Secretary, Department of Industrial Policy and Promotion (DIPP) did not explain how soon development of innovative methods of constructing low cost housing would become a reality but he said that the next Nano could very possibly happen in realty.
Technological innovationmay enable developers to make low cost housing financially feasible. The DIPP handles the matters pertaining to the granting of patents. It could however not be verifiedif any leading developer filed patent applications on building-innovation.
As developers are being increasingly compelled by the government to set aside a part of houses for the low income group it's to be expected that certain realty players may resort to technological innovation for building homes at a very low cost so that they can obtain a profit at the same time. There is also a possibility of obtaining subsidized land for low cost housing according to a government official.
This means that the next N ano in India could be an affordable home. Some realty players are near to developing innovative ways of building parts of a building in large volumes and transferring those to the real sites. Construction costs could be meaningfully lowered by this and that will make it possible for builders to venture into commercially feasible low-cost housing. An executive of Cushman & Wakefield says that as 70-80% of the demand for housing comes from more will come down, government should roll back taxes" Singh said.
He thinks banks need to lower their mortgage rate for demand to pick up in this sector."Housing and construction sectors are key sectors for revival of economy and the industry needs more funds," he said.
If this industry does not revive then there could be a cascading effect on a lot of industries and it will have a negative impact on the economy. While admitting that demand is much less than supply, Singh said that there can be layoffs in the future if the situation continues middle to lower segment and this segment is important. Because of the economic slump developers are compelled to consider this segment as it has now become tough going for luxury products. Technological innovation alone will not be sufficient and developers have to apply themselves to other areas so that affordable housing becomes financially workable.
Singh said that demand drives prices. He said that this is a free economy and if demand falls price of property will automatically come down. Singh said he does not think that real estate prices have been over priced at any point of time.
He said it has increased gradually like any other sector and hence it needs incentive from the government to bring down prices. He also said the company had deferred some of its projects due to poor demand. "In hotels, residential and commercial everywhere deferred because of lower demand and liquidity crisis," he said