CREDAI asked to survey unsold flats across India

MUMBAI: The Confederation of Real Estate Developers’ Association of India (CREDAI) has been asked by the government to prepare a list of unsold flats across India so that the government can decide upon unlocking their value for the benefit of builders who are allegedly sitting on the large pile of unsold inventory.

Union secretary for financial services D K Mittal at a joint meeting of Indian Bankers Association and CREDAI has asked the apex body of developers to conduct a survey of unsold housing stock across the country.

Mittal's move followed concerns voiced by finance minister P Chidambaram recently to bankers that developers were sitting on five lakh unsold flats which they are neither able to sell at the prevailing high prices nor are they allowing others to buy by lowering the prices, a media report said. Though they have challenged the FM's remark, CREDAI will be appointing an independent research agency to carry out the survey, it said.

It is believed that in Mumbai and Navi Mumbai area alone there are more than 80000 to one lakh housing units lying unsold and developers are not ready to reduce the price to clear the inventory.

The Finance Ministar has recently told in a meeting that developers across India are sitting on unsold flats, not ready to reduce the price and clear inventory, thereby causing strain to the economy.

According to CREDAI president Lalit Kumar Jain, “A developer when he announces a 7,000 unit township, puts only 400 to 500 units on sale. None of these 7,000 units are ready stock and so, cannot said to be available for sale as construed by the government. They (banks and government) are very keen to reduce property prices and asked for our commitment on this.''

The Union Secretary has met developers and bankers thrice to understand the issues of housing sector and developers' financing problems. At the meeting, CREDAI also reiterated its stance that limitation on land availability for realty projects and restrictions on floor space index also need to be addressed to increase housing supply and price rationalization, a TOI report said.

Bankers voiced concern at the ‘knotty’ issue of project approval process and urged the secretary to address this issue at the various state government levels. In the meeting, Mittal also asked the commercial banks to focus on funding partially completed projects on a priority basis and development of projects in small towns.