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Towards the Finish Line

Rashmi Pratap     August 19, 2019

The real estate sector has, for some time, been demanding measures to ease liquidity. In a meeting with Finance Minister Nirmala Sitharaman, industry representatives suggested the creation of a real estate stressed assets fund. This fund could take over stalled projects for completion. Currently, construction of nearly 1,75,000 homes in 220 projects has been stalled due to lack of funds or clearances.

However, the creation of a stressed assets fund is not the solution to the sector's woes, where unsold inventory will take 42 months to clear up. Real estate players require operating cash flows, which can come in only when sales take off. Currently, sales are tepid, and property prices have been either stagnant or have gone down in the top cities. While the government is giving incentives for affordable housing, it is time for developers to cut prices further and give incentives like staggered payment options to boost demand and spur sales.

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