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Doomsday in realty leads to top builders’ suicide?

The current policies are not developer friendly and it takes several months to obtain permission for commencing work on a new project.

ShorajThe suicide of builder Suraj Parmar, director of Cosmos Group and president of Maharashtra Chamber of Housing Industry (MCHI) Thane has revealed the problems faced by the realty sector. The realty sector has been witnessing a sluggish growth after the economic slowdown of 2008. As per reports there is close to 53,000 unsold apartments priced over Rs 1 crore in the Mumbai Metropolitan Region (MMR) alone. Since developers have been focussing on premium projects costing more than 1 crore hence middle class buyers stayed away from the market.

Buyers were waiting for the prices to fall whereas developers were holding on to inventories there by resulting into piling up of unsold flats in the city. The builders association has been asking the government to frame policies to kickstart growth in the realty sector. They also wanted the government to review the various clearances and permissions required for constructing new projects in the city. The current policies are not developer friendly and it takes several months to get permission for commencing work on a new project. All these factors are severely impacting the realty projects as the sector is witnessing a slowdown. Property developers warned that more builders may commit suicide if policy paralysis and political interference continues in the real estate sector.

“The developers kept on launching spacious units. This is why price-sensitive people, the lower end of spectrum, are not buying. There is mismatch in what the market wants and what they are developing,” said Ashutosh Limaye, head, research, Jones Lang LaSalle.

A suicide note was recovered from Suraj’s laptop in which he said that he was fed up with government rules and regulations on the housing sector because of which his business was not going on smoothly. He was facing financial problems due to slow progress in his projects. Officials said the income tax department had raided his projects, which had caused him a lot of stress.

Thane police PRO Gajanan Kabdule said, “Parmar shot himself in the neck with his licensed revolver. Our officers went to the spot for investigation and found a suicide note in his laptop. It is more than 15 pages. We are investigating the authenticity of the suicide note.”

Jitendra Mehta, who has been Parmar’s friend since 1999, said, “We all were shocked after we heard about the news. He was facing problems in business, but it was going on well. He had tremendous fighting spirit in him to tackle problems. He was a very enthusiastic and hardworking person. We were both part of MCHI.”

“Parmar used to fight politicians and officers over corruption but most of us settle the matter and close it, (but) those kind of margins are no more left in real estate to pay politicians and officers,” said the managing director of Mumbai based developer.

“Politicians and officers are exploiting and squeezing developers. It has become difficult to run the business. Most of the developers are under distress and balance sheets of developers are under stress due to delay in approvals,” said another developer on the condition of anonymity.

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