All will agree that buying or renting property for a living in Patna in today’s scenario is not everybody’s cup of tea in Bihar. Why is this so? When the global markets are down, business sentiments are cautious and the estimates of India’s economic growth remaining somewhere between 4.5-5% for the financial year 2012-13, the RBI, under pressure from the Finance Ministry, bankers and business lobby, reducing the repo and cash reserve ratio to give a booster doze to boil the economy – all these economic indicators belie the Patna property market. The property prices in Patna, especially in the residential segment, have sky-rocketed in the past years.
In the last five years the Patna property market has turned from the user- friendly to the investor-holding. Approach any builder, developer or broker for purchasing or booking an apartment in Patna the first answer will be the bookings are over! Upon a detailed inquiry the answer will be -there is only one investor flat on X floor and the rate is ABC. The builder or the developer is least interested to deal with the actual users as they fall in the category of ‘nuisance elements’ because if delivery is delayed beyond the due date, these actual users will be the first ones to haul up the builder /developer to court for compensation. But an investor is interested in returns. The more the delay the more the money in the hands of the investor. Builders/developers are issuing advertisements in the papers promising guaranteed returns on the flats/apartments and selling them as ‘investor flats’. There are websites advising/assuring investors to earn 200% returns on their investment in residential properties in Patna.
The concept of affordable housing in Patna is a farce. Despite over supply of flats, there is an unending dearth of dwelling units in Patna as there is no regulatory surveillance or interference. As compared to investments in gold, fixed deposits or capital market, the residential property segment in Patna on an average is giving a return of around 25-30% on a yearly basis and, in some cases; the range is 60-100% in just two and a half years.
The risk exposure of the banks and financial institutions to the real estate sector has risen exponentially in the last three years raising a question mark on the quality of their assets. Banks and financial institutions are reducing interest rates to report increasing growth in the home loan portfolio without giving any thought to repayments. Servicing of the loan is becoming a serious issue for the banks with more assets turning bad and non-performing forcing them to increase provisioning in the books and accept restructuring of payments from the borrowers.
When all the global markets are showing the signs of slowdown, the shares of the major real estate companies listed on the stock exchange hitting new lower circuits and the real estate companies finding it difficult to bear their debt burden, how can the property prices in Patna rise geometrically?
The load factor for the super built- up has reached 30% or more for all the buildings. Where is the administrative mechanism to punish the errant builders who demand all-cash for a parking slot? The state government is interested in collecting property taxes, stamp duties and registration charges and is least bothered to protect the interests of the real users and genuine buyers. There is no independent survey and no verified data are available with the government as to who are the buyers and for what purpose the flats are being bought by them?
Who cares for Patna? Patna is being defaced. The construction activity has become a 24- hour activity. Builders and developers are creating pyramids of profits by selling the void, the balcony and the floor bed areas for the structures constructed under the old Regulations. The construction/real estate sector is in the tight grips of the builders, politicians and the investors with a weak- kneed pliable administration at disposal to fulfill their murky designs.
The rent rigging has become the order of the day in Patna with the landlords forcing for immediate vacation if their demands are not met. The Reserve Bank of India is least bothered to protect the interests of senior citizens and small savers. Time and again it has buckled under the pressure from the bankers, brokers, industrialists and finance ministry in reducing the interest rates. Considering the present state of economic affairs and the inflation hovering around 10%, the RBI should have gone for a rate increase. Cheap money is being doled out to keep on the dirty dancing. If we buy the contention of the RBI and the industrialists on the faltering growth then why are the prices of property in Patna spiraling? The current scenario is: no more employment, no more enhancements in the salaries.
Which statutory or constitutional body has taken any suo-motu action against the greedy builders and the invisible investors?
As an instant corrective measure a complete ban should be imposed on the buying and selling of the under-construction properties. A builder or developer should be allowed to sell the flats only upon the completion of a project with an occupancy certificate. The flats or apartments in Patna bought for the purpose of investment should be seized immediately. There should be a hundred per cent transparency in the selling of a dwelling unit. A single – window clearance of all the papers and permissions pertaining to a housing project in Patna, the no-compromise regulatory body and the policy of no-more investment flats in Patna are the effective measures to make a house affordable for a homeless Patnaite.