HDFC’s Deepak Parekh On Stamp Duty Waiver And Commercial Real Estate Prospects
The chairman of India’s largest mortgage lender urged state governments to offer sweeteners to homebuyers to boost the housing sector. “Customers today prefer ready-to-move in homes over those under construction. I do hope some state governments will offer some sweeteners like say, a temporary stamp duty waiver, to encourage more homebuyers,” Deepak Parekh, chairman of Housing Development Finance Corporation Ltd., said at the company’s 43rd annual general meeting. Demand in India’s real estate sector hasn’t recovered since an overnight cash ban in November 2016 and a stricter housing law protecting buyers against fraud. A slowing economy and a liquidity stress aggravated the slump, stalling projects. And now a virus-driven lockdown has dealt a fresh blow.
Reduction of stamp duty as well as ready reckoner rates are some of the key demands from several real estate bodies in the country. HDFC was close to touching the two-lakh mark in terms of number of beneficiaries under the credit-linked subsidy scheme, Parekh said. “But despite Covid-19 derailing our plans, we’re sure we will get there shortly.” The scheme offers interest concession to middle class and lower income groups seeking to buy homes. “HDFC remains the leader in terms of having the largest number of customers who are beneficiaries under this scheme,” he said. “Especially in the major cities, unsold inventory was already high in the pre-Covid era.”
The commercial real sector has been impacted due to massive migration of workers, Parekh said, posing challenge to resumption of projects. “The sector needs support and policies are needed which will encourage labourers to come back to the construction sites with adequate precautions and protection; this is important because construction is the second-largest employment generator in the country.”
There’s a misconception that demand for commercial real estate will diminish with more opting to work from home, he said. “Many large companies have in fact acquired or leased commercial properties during this period–particularly in Bengaluru and Hyderabad,” Parekh said. “There’s demand for real estate from newer sectors like warehousing, e-commerce companies and from cloud and data centres parks as they seek to increase their data storage capacities as well"