Piyush Goyal asks property developers to cut prices to survive downturn

Goyal added that if developers feel that the government will finance them and they will hold longer for market to improve, market will not recover in a hurry. Photo: PTI
The Union Minister of Commerce & Industry Piyush Goyal in a webinar with real estate developers on Wednesday asked them to reduce prices and sell their inventory rather than wait for the market to bounce back.


“We are trying to see whether we can bring in some consession in ready reckoner (or circle) rates. But if that does not happen, you have to sell the inventory. Unless you reduce your rates, you will be stuck with inventory," said Goyal.


"You can be stuck with inventory and default or get rid of whatever you quoted at high prices. Consider it a bad decision and move ahead," he said.


He added that if developers feel the government will finance them and they will hold out longer for the market to improve, "the market will not recover in a hurry”. "Things are seriously stressed and your best bet is to sell. Those who have sold should leverage less and get rid of bank loans and survive the downturn. Those who are saddled with loans and holding on to prices have suffered," he said.


Last month, HDFC Chairman Deepak Parekh also echoed similar views in a call with developers.


Parekh said developers should be prepared for up to 20 per cent fall in housing prices and create liquidity by selling their inventory at whatever prices they get.


“The next six months are going to be extremely tough. You need liquidity. Get the cash flows coming by selling properties at whatever prices you get. Do not sit on completed projects,” Parekh said in a video call, attended by 5,500 developers and jointly organised by industry bodies National Real Estate Development Council and Credai.



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