Sell unsold units at 'no-profit-no-loss' to save interest, boost liquidity: Gadkari to realty cos

Union Minister Nitin Gadkari on Wednesday exhorted real estate players to sell unsold housing units, even at no-profit-no-loss, to boost their liquidity condition and save interest cost on loans.

The outbreak of coronavirus disease has impacted the real estate sector, which was already reeling from the demand slowdown, the road, transport and highways minister said while addressing a webinar organised by realtors' body NAREDCO.

Promising his full support, Gadkari, who also holds the MSME portfolio, advised builders to send their representatives to ministries of housing and finance as well as the Prime Minister's Office (PMO) to suggest ways to deal with the present crisis.

To tide over the crisis caused by COVID-19 and create housing demand, the senior minister offered a slew of suggestions to builders, ranging from business expansion in rural areas to diversification in road construction to setting up of their own housing finance companies.

Citing an example from the automobile industry where many manufacturers are having their own finance companies, Gadkari said real estate companies could consider establishing their own housing finance companies to give loans to customers at lower rates and not be fully dependent on banks.

He said there is a need to strengthen non-banking finance companies (NBFCs) through equity infusion from the government and private players.

The NBFCs should tap funds from international markets where interest rates are lower.

The minister pitched for lower interest rates on home loans with a longer tenure so that the customers' equated monthly installments (EMIs) remain less.

On builders sitting on huge unsold housing inventories, Gadkari advised builders, "Don't be greedy. You will not get a premium price. Whatever price you are getting, sell your properties to boost liquidity and move forward."