Union minister Piyush Goyal urges the developers to reduce prices for survival in this downturn after the Covid-19 crisis. In doing so, he is hoping the government will consider reducing the ready reckoner rates and change Income Tax Act.
Meanwhile, Builders want the government to make laws that shall not further tax them or home buyers for selling and buying at lower prices.
During a closed-door webinar with developers body NAREDCO, Goyal, said, “Unless you reduce your rates, believe me, you are stuck with your material, you can choose to be stuck with the material and default with the bank and then the material goes away, or you can choose to get rid of whatever you bought at high prices, look at this as a bad decision or an unfortunate situation and move forward.” The video of the minister asking to lower the prices has been making rounds on the social communication apps such as twitter.
Goyal further stretched, “If any of you here feels that government will be able to finance in such a way that you can hold longer and wait for the market to improve, the market is not improving in a hurry, things are seriously stressed and your best bet is sell”.
Goyal also said, “Those who have sold, leveraged less or got rid of their bank loans have survived this downturn, those who are saddled with large loans, who kept holding on to their price have suffered. My conscience is clear because, in every interaction of mine, I have said this point.”
On the other hand, raising a concern, Dr Niranjan Hiranandani, President, NAREDCO, said, “The moment we sell at a price that is 10 percent lower than the ready reckoner rate, both the seller and the buyer are penalized under Income Tax Act. The government should either reduce the ready reckoner rates or amend the Income Tax Act.”
Speaking of price correction, Mr. Anuj Khetan, Director, Vijay Khetan Group said that the real estate industry has already started considering the same if there are potential buyers. Developers are not turning away customers who are genuinely asking for a fair price. It is not that easy as it seems that the developers will reduce prices and inventory will fly off the shelf.
"Undoubtedly, the real estate demand is suffering from a systemic failure on many avenues. The industry’s expectation from the Government is to allow REITS and Foreign Institutions to invest in OC ready apartments which will eventually drive housing demand. This in turn will bring the institutional and individual investors back to the table as after a long time investment in residential real estate is making sense financially. This one small change in policy will have a domino effect on the whole industry towards its revival," he further added.
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Image courtesy: commerce.gov.in