Approval of Land Acquisition Bill May Increase House Prices

Bangalore: Property prices are expected to go up if the proposed land acquisition bill get approval nod by parliament, according to realty developers and property consultants.

“It is not a good development for the industry. This will definitely increase land cost and housing prices,” said Lalit Kumar Jain, National President of CREDAI (Confederation of Real Estate Developers’ Associations of India).

Jain further added that, if the bill passed by the parliament, developers may hesitate to come up with luxury projects. The proposed bill that has got clearance by the Union Cabinet made it mandatory that the consent of 80 percent of owners is required for private projects. Also, for public-private-partnership (PPP) projects, the consent of 70 percent of land owners is required, which is mandatory according to the bill. Moreover, the bill suggested hefty compensation and rehabilitation package to the land owners.

President Navin M Raheja, National Real Estate Development Council (NAREDCO) stated that the proposed bill is not an industry friendly. He further added that “While farmers’ compensation issue is taken care of, the government should have looked at the overall growth of the country. Unfortunately, that is not the case here.”

Mumbai-based Hiranandani Constructions Managing Director Niranjan Hiranandani said by compensating farmers well, the conflict over acquiring the land would reduce in future. And, on price context, he said that “Definitely land prices will shoot up. Now whether we will get land for affordable housing, is a big question mark.”

Prominent real estate firm, DLF stated that, only after the land acquisition bill comes into effect, the reaction of consumers can be noticed. “There has to be a debate in Parliament for this bill before the final approval. We will see how the situation unfolds in coming days as that will be crucial for any future decision,” according to Rajeev Talwar, Executive Director, DLF Group.

The bill would also affect the demand for housing projects in the coming years, according to Anuj Puri, Chairman and Country Head, Jones Lang LaSalle India. “Cost of land will go up and developers will pass on the additional burden to consumers. Definitely, it will affect the demand if prices go up beyond the capacity of a home buyer,” added Puri.

With PTI inputs