Bengaluru : CREDAI Bengaluru President Amar Mysore, who recently completed his first year in office, expressed optimism about the growth of the real estate market in Bengaluru during a recent media interaction. He said that CREDAI Bengaluru is working closely with the state government to address several challenges that the sector is facing so as to create a more conducive environment for real estate development.
CREDAI Bengaluru has presented a submission memorandum to the government to implement several reforms that would help streamline the real estate development process in the Bengaluru region. These amendments aim to address the challenges faced by developers and improve the overall efficiency and sustainability of the real estate sector.
Key areas of focus include providing clarity on the transferable development rights (TDR) issue that has been long pending and simplifying the regulations. Currently it is a very cumbersome and tedious process. By simplifying this and ensuring that the development rights certificate (DRC) is undertaken at the prevailing guidance value, it would bring in confidence, as the Planning Authorities can acquire land for infrastructural projects and the landowner giving up the land will not be disadvantaged when the TDR certificate is issued.
Streamlining plan approvals is another priority, with measures such as implementing a single window system for obtaining No Objection Certificates (NOCs), reducing approval fees that are currently linked to guideline value, and standardizing zoning regulations across the various planning authorities to bring in synergy and ease of doing business. To improve efficiency, CREDAI Bengaluru proposed eliminating unnecessary procedures like commencement certificates, standardizing buffer zones especially for a city that has moved away from an agrarian economy to a tech capital and incorporating new uniform zonal regulations for the entire Bengaluru Metropolitan Region.
Reducing financial burdens is also essential, and CREDAI Bengaluru recommended lowering stamp duty rates for Joint Development Agreements and for Mortgage of Title Deeds which recently has been increased on ad valorem basis without any cap. Additionally, CREDAI Bengaluru suggested implementing a staggered payment scheme for remittance of labour cess since the construction happens over a period of time.
According to Amar, the government can foster a more conducive environment for sustainable and efficient real estate development in Bengaluru by addressing these issues. This will not only benefit developers but also contribute to the overall growth and development of the city.
He said that residential project launches and sales in Bengaluru are expected to increase by 10-15% in 2024 compared to the previous year. The market is poised for significant expansion across various micro markets due to strong IT sector growth, a thriving start-up culture, and ongoing infrastructure development. Emerging micro markets like Bagaluru and Varthur/Gunjur have witnessed substantial price appreciation and increased new supply with Bagaluru experiencing a nearly 70% surge in residential property prices over the past five years with bulk of the new supply priced between ₹40 lakh and ₹1.5 crore. Sarjapura, another emerging micromarket, has also seen about a 50% price jump in recent years.
Infrastructure developments, such as the ongoing construction of new metro lines and improvements in road connectivity, are expected to further boost property values and enhance the quality of life in these areas. Developers are also increasingly focusing on ramping up inhouse construction to combat the shortage of quality contractors and innovative construction technologies to tackle the severe labour shortage while trying to meet the growing demand.
CREDAI Bengaluru is committed to advocating the interests of its members and working with government authorities to resolve these challenges. Amar expressed confidence in the government’s efforts to improve the regulatory environment and create a more favourable climate for real estate investment in Bengaluru.
