During a webinar with developers on Wednesday, commerce minister Piyush Goyal said that property developers should cut prices to survive the downturn and that property markets were not improving in a hurry.
"We are trying to see whether we can bring in some conscssion in ready reckoner rates or something. But if that does not happen, you have to sell the inventory. Unless you reduce your rates, you will be stuck with your inventory," said Goyal.
"You can get stuck with inventory and default with banks and then inventory goes away or choose to get rid of whatever you quoted at high prices and look at it as a bad decision, or unfortunate situation, and move forward," he said.
He added that if developers feel that the government will finance them and they will hold longer for market to improve, "market will not recover in a hurry," he said.
"Things are seriously stressed and your best bet is to sell. Those who have sold should leverage less and get rid of bank loans and survive the downturn. Those who are saddled with loans and are holding on to prices have suffered," he said.
Last month, HDFC chairman Deepak Parekh also echoed similar views in a call with developers.
Parekh said developers should be prepared for up to a 20 per cent fall in housing prices and have to create liquidity by selling their inventory at whatever prices they get.
“Next six months are going to be extremely tough. You need liquidity. Get the cash flows coming by selling properties at whatever prices you get. Don’t sit on the completed properties,” Parekh said in a video call, attended by about 5,500 developers and jointly organised by industry bodies Naredco and Credai.