Goyal’s ‘reduce price’ advice doesn’t go down well

Goyal's advice to reduce prices doesn't go down well
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Goyal’s advice to developers to reduce price hasn’t gone down well with the real estate fraternity. Builders claim the need is to lift sentiments and provide assistance to the sector.

By Varun Singh

On Thursday one thing that most developers, even International Property Consultancy firms discussed aggressively was Goyal’s advice to builders.

Goyal’s advice to builders was, “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 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.”

Also Read: Reduce prices to survive or suffer: Goyal to builders

Goyal was speaking at a closed door webinar organized by builders body NAREDCO.

However, Goyal’s video of he speaking firmly to developers on government’s stand went viral on social media.

Post which there were many remarks and comments from the real estate industry.

Rajesh Prajapati, a prominent developer from Mumbai Metropolitan Region and also a member of CREDAI tweeted, “I just hope banking, steel and cement industries also invite Piyush Goyal for webinar. Maybe developers will be able to reduce prices if these industries also reduce theirs. I also hope cost of railway tickets is reduced.”

Prajapati’s tweet on Goyal’s twitter post.
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Another developer Anuj Khetan, of Vijay Khetan Group said, “Speaking of price correction, 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.”

Another developer, Hakim Lakdawala, of Goodwill Developers, said, “This announcement by the Union Minister Piyush Goyal advicing the developers to reduce property rates is only going to add to the pressure that the sector is already reeling under with high taxes, cost of production and ready reckoner rates. We hope that Government and Authorities help us re-initiate our construction activities so that we can return to normalcy by Diwali and the demand too shall pick up post the festive season.”

Even IPC have termed Goyal’s advice as valid but not viable. Shishir Baijal, Chairman & Managing Director, Knight Frank India, said, “At some level, the suggestion by the minister to developers to lower prices is valid as it may help reducing inventory, though it may not be the most viable.”

Baijal further added, “The crux of the problem lies in dwindling demand that the sector has been experiencing for last few years. Therefore, the main solution will be in creating stable long-term demand by providing adequate boost to economic growth and stability.”

Most developers are expecting concrete solutions from the government. They are hoping that government will reduce ready reckoner rates, provide them with GST waiver on under construction home sales.

According to Baijal, any movement on ready reckoner rates, stamp duties and taxes will come as a further relief to help converting latent housing demand to sales. The real estate sector thus needs tangible measures to resurrect demand and ease the concerns for all stakeholders in the sector.”

Even Khetan said, “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.”

Also Read: Lodha sells more than 1000 homes during lockdown

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