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HDFC chairman Deepak Parekh (Photo: PTI)
HDFC chairman Deepak Parekh (Photo: PTI)

State governments must waive off stamp duty to encourage homebuyers: Parekh

'Customers today prefer ready to move in homes over under-constructed ones. I do hope some of the state governments will offer some sweeteners like, a temporary stamp duty waiver, to encourage more homebuyers,' said Parekh

HDFC chairman Deepak Parekh on Thursday urged state governments to offer some incentives to homebuyers in order to boost the housing sector.

“Customers today prefer ready to move in homes over under-constructed ones. I do hope some of the state governments will offer some sweeteners like, a temporary stamp duty waiver, to encourage more homebuyers," said Parekh.

Reduction of stamp duty as well as ready reckoner rates have been some of the key demands from several real estate bodies in the country.

Parekh also said that the commercial real estate sector has been impacted due to a massive migration of workers, posing challenge to resumption of projects. “The sector needs support and policies are needed which will encourage labourers to come back to the construction sites with adequate precautions and protection; this is important because construction is the second-largest employment generator in the country," he said.

According to India Ratings, the current pandemic is likely to push overall residential demand in fiscal year 2020-21, down over 25% from a year ago. The rating agency added that the lockdown has resulted in rise of unsold inventory levels to over 15 quarters at end of fiscal year 2019-2020.

Parekh also noted that there is a misconception that demand for commercial real estate will diminish with more opting to work from home. “Many large companies have in fact acquired or leased commercial properties during this period – particularly in Bengaluru and Hyderabad," he said.

The recently concluded Rs4,500 crore IPO of Mindspace Business Parks REIT, which owns almost 29 million square feet of office space across the country, was lapped up by investors, both foreign and domestic, indicating that investors continue to be bullish on the commercial real estate space. The IPO received bids for 13 times the number of shares on offer. Investors such as Singapore's state investment firm GIC, Fidelity and Capital group subscribed to the IPO.

“There is demand for real estate from newer sectors like warehousing, e-ecommerce companies and from cloud and data centre parks as they seek to increase their data storage capacities as well," Parekh added.

Parekh also said he expects pick-up in residential sales in the category where home prices are available at affordable prices.

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