New Delhi: Real estate developers on Thursday sought immediate government intervention to tide over the stress in the sector that has resulted in poor demand and high inventory, at a meeting chaired by housing and urban affairs minister Hardeep Singh Puri here. A follow up meeting will be held shortly with finance minister Piyush Goyal.

At the meeting, builders sought reduction of the goods and services tax (GST) on construction services from 12% and better access to finance, an executive from the Confederation of Real Estate Developers’ Associations of India (CREDAI) who attended the meeting said on condition of anonymity.

The high levels of inventory of houses in various cities were also discussed at the meeting. Industry representatives expect the government to offer ways to revive the sector at the next meeting.

Niranjan Hiranandani, co-founder and managing director of the Hiranandani group, said after the meeting that GST rate on house construction needs to be rationalised to give boost to the realty sector. While land is out of GST, construction services attract a 12% GST with full credit for the taxes paid on raw materials. Hiranandani said that the meeting also discussed affordable housing projects and that the government was keen to resolve the hurdles facing the sector.

The real estate sector in India has been in the doldrums at least since 2013. With very little demand for new houses, property prices have stagnated. According to National Housing Bank data, property prices in Mumbai and Bengaluru increased annually by just 7.50% and 5.75%, respectively, between June 2013 and September 2017. In Delhi, prices actually fell by 0.70% annually during the same period. According to industry estimates, clearing all the built yet unsold houses in cities such as Bengaluru or Mumbai would take between 40-60 months at least, assuming no new houses come on to the market.

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