The real estate industry should adopt new technologies and reduce their construction cost and sell inventory at a low cost, said the union minister
Mumbai: Union Road Transport and Highways Minister Nitin Gadkari on Wednesday asked real estate developers to clear their inventory without looking for high profits to save interest costs.
In his address at a webinar organised by the National Real Estate Development Council (NAREDCO), Gadkari said that developers are sitting on huge inventories and they should sell flats at 'no-profit, no-loss' or whatever price they get for a liquidity boost and then move ahead.
He also suggested to the industry body that real estate companies can have their own NBFCs in the line with automobile companies.
"(Many) Automobile companies like operate their own finance companies for benefiting the customers. Even associations should form their own NBFCs to run the business. This will help developers to provide cheaper loans to home-buyers with faster approvals," Gadkari said.
"The real estate industry should adopt new technologies and reduce their construction cost which will help the sector to generate more demand and sell inventory at a low cost," he added.
The Minister also said that the Central and the state governments are planning to purchase housing quarters for employees on a large scale and if associations come forward with some plans that can be proposed to the government, it will certainly help the developers with liquidity.
NAREDCO national President Niranjan Hiranandani said: "His suggestion about real estate developers also diversifying from plain residential real estate to infrastructure and new asset classes like warehousing, infrastructure, logistics to keep liquidity flowing and functional was a brilliant suggestion."
Construction and real estate provides employment to around 15 per cent of the labour force in India, contributing nearly 8 per cent of India's GDP, and his suggestions will definitely take the share to higher numbers, Hiranandani added.