Realty developers unhappy with proposed reduction in prices
Developers rejected RBI Governor’s plea for lowering prices of property in order to encourage investment in real estate sector. Mounting NPAs and non- delivery of projects are prime reasons for such pessimism amongst builders as further cut would result in augmentation of both.
In the backdrop of industry lows, Raghuram Rajan, RBI Governor, during his lecture in Y B Chavan Memorial requested to lessen price which according to him would enable the customers to part with savings and put in their resources to buy estates, eventually rejuvenating the sector from black hole.
In response, Getamber Anand, CREDAI (National) President, confirmed that about 90 percent of real estate stock in the United States has seen a correction of approximately 20–30%. Hence, there is no scope for more rates cut as any more cut can result in NPAs and non-delivery of projects. Though he also clarified what RBI Governor suggested was a spinal manipulation and never always a cost cut accordingly he shouldn’t be removed from context. Besides, Anand, stated the adjustment might be done through different ways like easy payment plan to draw attention of home purchasers.
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Pawan Kumar Dhoot holds the same opinion in align with CREDAI President and seconds each word spoken by him as industry has to develop for both investors and developers, only increase in buyers would not help if it is done at the cost of realtors margin.
Earlier this year the insurance policy has reached its lowest level in additional 5 years as the rate was reduced from 0.25% to 0.50% while RBI has already decreased cumulative rates by 1.5% from last January.
