Perspective on the advice by minister Mr. Piyush Goyal for the real estate industry

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by Mr. Shishir Baijal, Chairman & Managing Director, Knight Frank India

“Key markets across India are facing uncertainty, and the confidence erosion amongst buyers is visible across all categories of residential real estate. Developers are already dealing with mounting concerns over unsold inventory and liquidity. Most developers are struggling to maintain their margins and may not have too much leeway to cut prices further. At some level, the suggestion by the honorable minister to developers to lower prices is valid as it may help reducing inventory, though it may not be the most viable. 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. 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.”

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