Across the country the average prices of real estate housing projects have gone down by 15% to 20% in last 18 months. On last 9th December, CREDAI has clearly said that there’s no scope of further reduction in prices.
Housing sales have gone up by 15% in last festive season. Interest rates of bank loans have also reduced significantly. Increase in sales along with home loan interest rate reduction has in turn reduced the prices of these projects. According to the realtors’ apex body, CREDAI near about 25% to 30% launched units are still unsold all over the country.
Being concerned about the sales of real estate projects, the association, CREDAI has asked both central and state Government to rationalize property tax structure. CREDAI has also emphasized the Government to adopt single window approval for all the projects to simplify the process for the buyers. Mr Anand, the president of CREDAI said “We are seeing improvement in the demand. Prices have come down by 15-20% in last one and a half years and there is no further scope for reduction.” He also added that the sales in this festive season has significantly gone up which is a positive sign for the real estate business.
On asking about unsold inventories, Mr Anand was very specific and was very clear on the percentage (25 – 30%) of unsold housing projects launched at present. However, the association didn’t say any number. Very interestingly CREDAI has tied up with CRISIL for getting statistical data on new launches, unsold inventories and sales figures. CREDAI has also particularly said that instead of developers contractors should be held responsible for non-payments of PFESI to labourers as they are the principal employers in such case.
Rohit Raj Modi, the vice president of CREDAI said that there’s a case of duplication of tax in form of ESIPF as 1% labour cess is already paid by the industry to the Government. As much as 27, 000 crores are lying unused in that account. Both simplification of tax and single window approval process implementation are important for ease of doing business. Opinion was also given on the proposed GST law. The real estate industry should not be subjected to stamp duties or GST rate.
The association questioned the directives of SEAC to spend 2% of the project cost on corporate social responsibility activities.