Indian government says reduce home prices⁠— reduce land prices is the realtors’ retort

• “Bring the land prices down near to zero, and you will have enough affordable housing all over the country,” said DLF managing director Rajeev Talwar while talking to Business Insider.
• There are over 6.5 lakh unsold properties across India, but the government has so far denied any financial support or bail out for the sector.
• Union Minister Piyush Goyal recently told the realtors that they will have to slash prices and sell homes cheaper, if they can’t hold on to them any longer.
• Property demand in India has been on a downtrend for a few years now. Still, prices of new homes have not fallen as drastically as the demand itself.

Rajeev Talwar said if the government wants to push down the house prices, they will have to push the land prices down first.

“Whether it’s the Central government or State government if they bring the land prices down near to zero and you will have enough affordable housing all over the country,” said DLF managing director while talking to Business Insider.

Real estate developers have been complaining for a few weeks now that they have been left out of the various stimulus programmes announced by the Narendra Modi government aimed at reviving the economy from the debilitating impact of the COVID-19 pandemic. However, in a recent conversation, Union Minister Piyush Goyal had dashed their hope for a financial bailout.

Instead, Goyal said that it is now up to the developers to sell their unsold inventory at lower prices and start repaying banks.

But one section of the BJP seems to be backing the realtors’ cause

Former Maharashtra chief minister Devendra Fadnavis has extended his support to the real estate developer community with the Centre.

CREDAI, the real estate developers’ associations of India in a statement said, “Fadnavis has told them that he has already indicated to Union Finance Minister Nirmala Sitharaman beforehand that he would be accepting a petition from the developers. “She immediately gave me a go-ahead,” he said and expressed the confidence that “she will definitely look into the issue”. “I have already been discussing the real estate and other economic issues at various levels at the Centre and getting a positive response.”

Property demand in India has been on a downtrend for a few years now. Still, prices of new homes have not fallen as drastically as the demand itself, particularly in big cities like Mumbai and the National Capital Region. In fact, a survey by the Reserve Bank of India last year found that homes had become less affordable between 2015 and 2018 while the demand was still slack.

Between October 2018 and October 2019, the average price per square feet, across India, has only gone up while the unsold inventory of homes remained high. Even in the first quarter of 2020, when India’s GDP growth hit a six-year low, Bengaluru, Delhi and Mumbai were among the world’s top 50 cities for rising property prices, according to a Knight Frank report.

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