Pressure mounts on realty firms to cut prices

21 November 2008

New Delhi: Pressure seems to be mounting on real estate companies for a downward revision of selling prices of their projects. Two industry bodies, the Confederation of Real Estate Developers Association of India (CREDAI) and the National Real Estate Development Council (NREDC) have asked their members to cut rates on housing projects by up to 15 per cent to revive sales.

The development comes even as real estate companies like DLF, Parsvnath and Emaar MGF are seeking tax concessions from the government.

Companies like Ansal API, Omaxe, Assotech and DLF have already agreed to cut prices. Bangalore-based Sobha Developers has also promised to evaluate slashing rates, NREDCO President Rohtas Goel said.

The Council has asked members to cut sales price by 1-5 per cent for existing projects, 5-10 per cent on future projects and 10-15 per cent on affordable housing ranging between Rs20 lakh.

The Confederation of Real Estate Developers Association of India (CREDAI) has asked its members to revise prices downwards, though not many of its members seem inclined to do so. 

Mmedia reports quoted DLF chairman KP Singh as demanding a rollback of taxes imposed on the real estate sector by the government, while being non-committal on price cuts, saying that prices are a function of demand and supply.