Housing minister coaxes realtors to offload unsold inventory

Housing and urban affairs minister Hardeep Singh Puri has urged real estate developers to offload their unsold inventory in the market rather than hold on to them for a specific price environment.

“Offload, offload, offload – get rid of your inventories. The country needs that from you and you will also benefit from that activity. Let’s now look at a new beginning,” Puri told realty developers at a NARDECO-APREA virtual conference. “With the economy bearing the brunt of the adverse impact of Covid-19, the real estate sector plays a crucial role to revive the economy and kickstart a virtuous cycle of economic growth.”

The minister highlighted that property sales registration in Maharashtra in September surpassed levels in the pre-Covid-19 era and were the highest in this calendar year. According to him, a major factor that contributed towards this growth was the reduction in stamp duty by the state government and other steps by the Central government.

For the past few months, realty developers have been offering discounts and incentives including subsidy on under-construction and ready properties to attract homebuyers and prop up sales.

The minister praised NAREDCO Maharashtra’s developer members for absorbing the homebuyers’ stamp duty burden and suggested that developers in other parts of country should take the same initiative to prompt sales activity.

Puri said he has written to all state governments and Union Territories to follow Maharashtra’s move to cut stamp duty to encourage sales and accelerate economic activities.

The government would ask other financial institutions to open up the financing avenues on the lines of the government-backed Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects (SWAMIH I) to provide priority debt financing for the completion of stalled housing projects, Puri said.

Earlier this year, ministers Piyush Goyal and Nitin Gadkari and finance industry experts including Deepak Parekh and Uday Kotak also suggested that realty developers liquidate their unsold inventory.

The realty sector has strong links, especially with core sectors such as steel, cement and other building material. With its impact on 270 industries, an upswing in the real estate sector will have strong implications for other sectors as well, especially the financial sector, Puri added.

Responding to feedback by developers on delayed environmental clearances, Puri assured them he is ready to speak to environment minister Prakash Javdekar about the matter.

“I am willing to write a letter to him, but let me know what is the nature of these clearances, which are getting delayed… If you are compliant, I don’t see why we should be in a position of having to face delays, when all the other compliances are in place,” Puri said.

According to him, the Covid-19 pandemic is a blip in the economic growth story, but eventually the real estate sector will emerge stronger. The pandemic will undoubtedly change the way one lives and works and emerging trends will become part of our “new normal.”