Letters: Realty blues

This refers to the article, "Why real estate may not crash" (July 31). The author's argument is based primarily on his assessment that a sizeable number of builders are not highly leveraged and hence can afford to sit on their inventory of unsold stock.

However, an important factor that may come into play is the government policy on the anvil. The government is likely to make it expensive for builders to stop work on unfinished projects by making them pay interest to the buyers, if the project is not completed by the promised date. If that happens, builders would be forced to raise money by selling their ready stock to complete the projects. Even if corporates take over the incomplete projects, they may not oblige the builders by buying at the market price. They will try to squeeze the builders as much as possible and that should bring down prices.

Kishor Kulkarni Mumbai

 

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