The Confederation of Real Estate Developers Associations of India (CREDAI) plans to take up various real estate sector concerns with the Government shortly seeking its intervention in addressing the problems of a sector which contributes to about 7 per cent of GDP.

Jaxay Shah, Chairman of Credai, said: “The real estate sector looks fragile, needs course correction immediately. Or else it will be in deep trouble. Slowdown in the real estate sector has a cascading impact on nearly 150 industries which support the sector.”

More than 1200 Credai members who have converged here for the 19th Annual Meeting Natcon, took time off to interact with one another and network sharing their concerns while seeking work towards paving way for faster development of the sector.

With real estate is contributing nearly 6-7 per cent of the country’s GDP and being a major employment generator, if it grows at a faster pace, they believe that it will play a significant role in the India Government’s stated goal of transforming it into a $5 trillion economy.

Identifying liquidity and multiplicity of enactments regulating the real estate sector, among host of other issues, including high interest rates and the need to remove some of the conflicting Income Tax related issues with regard to affordable housing, the Credai team plans to soon meet the Government seeking its intervention in resolving their concerns.

Sharing their concerns, Satish Magar, President, said the Government intervention was immediately required to pave way for course correction and accelerated growth. The way insolvency laws are being applied for the realty sector needs a fresh approach.

Key to affordable housing

Liquidity they said was one of the key concerns for the sector and the RBI and the banking sector should address this immediately. They also felt that the interest rates need to soften further and Income Tax provisions relating to affordable housing need to be revisited.

Credai believes that the demand for residential and office segment will continue to grow if the policy reforms on Affordable Housing are brought about.

Mentioning about multiplicity of enactments which impact the real estate sector, Satish Magar said that after the RERA has come in, we need to make it the main enactment for consumer concerns. If at all needed, other parallel remedies could be considered only at an appellate stage.

Shah expressed the need to move away from the Government control and become an enabler.

Admitting that the sector is passing through tough times and is in a consolidation phase, Shah said during the phase of stress, the sector needs to learn and take it forward with resilience for better growth phase ahead.

On the importance of affordable housing, Magar said first time buyers should have access to interest rates at 7.5 per cent. This should be looked at priority sector as it has potential to accelerate growth.

Shah said bankers are not releasing funds and this should be looked immediately. Bringing about liquidity and lowering interest rates will help create fresh demand.

(The correspondent was in Tel Aviv to attend Natcon on the invitation of CREDAI.)

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