After Deepak Parekh and Piyush Goyal, now Uday Kotak tells builders to cut prices and sell

Union minister Piyush Goyal caused a stir on Wednesday, when a video of home persuading property developers to reduce prices and sell homes to tide over troubling economic circumstances began doing the rounds on social media. Goyal was speaking at a webinar organized by the National Real Estate Development Council (NAREDCO).

“If any of you feels that the government will be able to finance in such a way that you can hold longer and wait for the market to improve, the market is not improving in a hurry,” Goyal said, “Things are seriously stressed, and your best bet is (to) sell.”

In April, HDFC Chairman  Deepak Parekh had said that real estate prices could correct by as much as 20 percent in the near future.

“I think the prices of real estate have to come down and will come down. I believe NAREDCO’s estimate is between 10-15 per cent. I feel one must be prepared for even 20 per cent,” Parekh had said while addressing representatives from the real estate sector through a video conferencing. The event had been organised by real estate developers associations NAREDCO and CREDAI.

Meanwhile, real estate stocks began taking a hit in early trading on Thursday, as news of Goyal’s comments began doing the rounds.

Developers like Niranjan Hiranandani were quick to point out to CNBC-TV18 that developers could explore cutting prices only if the government slashes circle or ready reckoner rates, to begin with. Goyal himself said in the same video that irrespective of whether the government cuts these rates, developers will have to sell inventory in their interest.

Both, Goyal and Kotak have exhorted developers to disregard expensive land acquisitions in the past and not let it weigh down their decision to sell real estate at competitive rates. “If land was bought at a high price in the past, it is irrelevant to today,” said Kotak, “Bringing down prices and clearing inventory is good for all Indians.”