Unsold realty inventory may be taxed
According to him, the inventories are stagnant despite a fall in the property prices, which is not a good sign for the economy.
The latest data compiled by real estate consultant Liases Foras suggests that in the top eight cities, which indicate the broader health of the real estate market, there is total unsold inventory of nearly 1000,000 units. However, data for 50 cities has 1150,000 unsold properties. This is when the real estate market is witnessing a slump despite a 20 per cent price correction in the past two years.
According to real estate consultants, developers would take at least 44 months to sell these inventories in current pace of sales. "Taxing stocks in trade will increase burden on the real estate developers, especially when they are finding it difficult to sell stocks at the current market price. However, this will induce developers to sell property at competitive price,” said Pankaj Kapoor, founder and managing director of Liases Foras.
The government’s move to clamp down on black money hoarders through note ban has showed positive effect on the residential market in the country. Post demonetisation, many developers seen to have reduced prices. But at the same time, developers at cities such as Mumbai, Chennai and Bengluru are reluctant on lowering prices, citing reasons like high construction cost arising from liquidity issues and delay in obtaining approvals from several authorities.