‘Developers must compromise on prices’

HDFC Ltd chairman Deepak Parekh has urged real estate developers to “compromise” on property prices in a bid to sell off their unsold inventory and generate liquidity rather than opting for costly borrowings once the nationwide lockdown has been lifted.

Speaking at a webinar organised by real estate industry bodies NAREDCO and CREDAI, Parekh said, “A bit of compromise in the prices by developers will revive the real estate sector on demand stimulus on the next six months. The buyers who are in liquidity should buy properties now and the inventories will be available on good price.”

He also urged developers to concentrate on completing their pending projects on time, rather than going in for new launches. “You can also get into joint arrangements with corporates to complete projects,” he said. “Borrowings are a double-edged sword. While you can leverage and grow during good times, in bad times, it can finish off your business. So you need to know the perils of leveraging during such times,” he said.

The webinar was attended by more than 8,500 developer participants from across the country, including Niranjan Hiranandani, president of NAREDCO and ASSOCHAM; Irfan Razak, chairman and managing director of the Prestige Group; and J.C. Sharma, vice chairman and managing director of Sobha Limited, among others.

According to Parekh, the demand for commercial real estate would continue in the long run. “It won’t be a situation where the entire workforce would want to work from home; people would still need to meet others, so in the long run, the demand for commercial real estate will not evaporate.”

Rajan Bandelkar, president, NAREDCO-West, said that the government needs to come forward with measures to help out the real estate industry, which is the the second-largest employer in the country. “Any impetus given to it has a multiplier effect on other sectors as well.”

Bandelkar added that the time is right for those wishing to invest in real estate. “Prices are really right at present and the interest rates are also low. People who have been waiting to invest won’t find a better time to do so.”