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Thiruvananthapuram: Reflecting a slump in the construction sector, building permit revenue fell 53% between 2019-20 and 2020-21, according to figures presented in the company’s budget for 2022-23. The sluggish sector has also forced the finance committee to lower the estimate from a projected Rs 25 crore to Rs 13 crore for the year 2021-22.
The lack of optimism is evident in the expected estimate for 2022-23, as well as the estimated building permit fee collection is set at Rs 20 crore; even less than what was expected in the previous year.
Over the past decade, revenue from building permit fees has been one of the main sources of revenue for the municipality. It had risen from Rs 2 crore in 2010-11 to cross Rs 10 crore per annum, which had prompted the finance committee to move the projections closer to Rs 20 crore in recent times.
“In 2019, the building rules were changed. With very little buildable land, vertical expansion is the way to go. However, the changes affected this building plan as regulations were introduced regarding the floor area index. Due to the intervention of architects and builders, some relaxations came into force in 2020 which was a relief. Even then, given the need for more area for construction, the regulations imposed without proper consultation have really affected the construction industry,” said VS Jayachandran, Chairman, CREDAI, Trivandrum.
The representatives hope that with the introduction of a new master plan, many problems will be solved.
“There must be a platform for proper consultation with stakeholders. This will help reserve specific areas available for construction,” VS Jayachandran added.
Real estate representatives point out that due to the huge increase in construction costs, many builders are struggling to finalize the cost.
“The cost of construction has increased by 1,000 per square foot in one year. This creates a lot of apprehensions regarding new launches and pricing. By the time the building is handed over to the client, the initial rates estimated for construction 3-4 years ago would have varied so much,” said one builder.
According to people in the area, land of 30 to 40 cents is difficult to find within the limits of the corporation and when the project has to be transported to the suburbs, many people are skeptical, which also leads to a drop in construction.
However, the sector is not lacking in optimism. “The demand for housing in the neighborhood is really encouraging. This is a good sign after the pandemic. The number of vacant apartments has decreased and bookings are underway for new ones,” said an estate agent.