With a huge inventory of unsold units in cities, the real estate sector could get the liquidity it needs by tying up with governments and public sector undertakings (PSUs) that require housing for their employees, Union Minister Nitin Gadkari said.
The real estate sector could work with the Centre, State governments and PSUs to completely or partially sell their unsold units for use by their employees, he said.
He was participating in an online seminar of the National Real Estate Development Council (NAREDCO) on Wednesday.
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“Instead of making our own schemes, the Centre and the State governments can take these existing schemes and negotiate. You [real estate developers] will get liquidity. The governments will get the housing for cheaper. Dead stock will be cleared,” he said.
The real estate sector could also set up its own non-banking financial companies (NBFCs) like automobile companies had with government and bank equity, as well as foreign investment. These companies could enable lower interest rates, which would boost the demand.
The Minister asked the real estate developers to invest in smart cities and villages that are proposed to be set up along the industrial corridors.
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Pressed by NAREDCO members for a relief package for the sector, he said the government was working on an overall package.
Mr. Gadkari, who holds the portfolios of Road Transport and Highways and Micro, Small and Medium Enterprises, said though he was not the Minister concerned for the housing sector, he had some suggestions to help the sector.
Earlier, NAREDCO president Niranjan Hiranandani raised the concern of low demand in the past one year and a half, saying that “many real estate companies are facing a liquidity crisis.”
Fighting financial crisis
Mr. Gadkari said, “We will win the fight against COVID-19. After that, we will have to fight the financial crisis. Even before COVID-19, the condition of the sector [real estate] was not good.”
He also suggested increasing the tenure of housing loans, while citing the example of road infrastructure projects.