Serious troubles faced by construction sector in Chennai
Posted on: 06/Apr/2017 2:47:23 PM
Construction sector in Chennai is facing severe crisis due to a number of factors such as increase in guideline value, taxation system, price hike of cement, etc.
Out of the total production made in India, 5 percent of it is made by building construction sector of which the Chennai construction sector plays a vital role - thanks to the availability of basic amenities in the city and lesser cost of living.
Furthermore, apart from the IT sector, car manufacturing, machinery manufacturing, exporting, etc are among the top businesses in Chennai city. However, not being able to sell newly constructed properties, not being able to handover houses to buyers with whom the constructors have indulged in an agreement, etc are some of the pressures Chennai is under.
Speaking with one of the industry experts, he says the Chennai construction sector has been in downward phase in the recent days and is getting eventually recovered. There are many beneficial announcements made during the budget this year. The interest rate on housing loan is also reduced. All these will be helpful for the Chennai’s construction sector.
The inquiry calls from buyers has doubled. Buying house is a good investment at present.
The former president of Chennai suburban builders association Ragunath says the amendments made in the Real Estate Rule last year has brought a lot of troubles to the sector. According to these amendments, it is imperative to register the agreement made between builder and customer. While there are service tax, registration fee, etc already in practice, this new rule adds burden to us, he points.
Per sq.ft, Rs 650 is the charge for registering a property. About 10 years ago, the same was Rs 100 lesser, he recollects. The rule is anyway imperative because customer protection is mandatory, say officials.
Continual increase in rate of construction materials, scarcity, etc are some of the other troubles in the sector. Increase in cement rate, scarcity of construction sand, etc make the sector’s growth questionable.
Constructors blame these reasons together with water scarcity as the major threats to the sector. Small level constructors are badly hit due to these. Low priced houses may substantially reduce.
While these are one side of the coin, there are continuous fraudulence cases against popular construction companies. Land fraudulence, sudden hike in rate after agreeing to a specific price, not finishing the construction within promised deadline, etc are some of the troubles customers face.
