New Delhi, April 21 : As the coronavirus crisis has hit the Indian real estate hard, Chairman and Managing Director (CMD) of Shriram Properties Murali Malayappan says that market players may go through another phase of consolidation in the coming months as the pandemic subsides.

Speaking to IANS, Malayappan said that cases of non-performing assets (NPA) may rise in the real estate sector. He suggested that initially the government should bring the GST rate to zero and state stamp duties should also be lowered for the next one year.

The sector witnessed massive shake-ups -- mergers, amalgamations and exits by several developers -- post the implementation of the Real Estate (Regulation and Development) Act, 2016 which was meant to streamline and regulate the largely unregulated and unorganised market.

"Some of them (developers) will become NPAs nowa and this will lead to some more consolidation. As RERA, GST and demonetisation brought consolidation to the industry, this will provide another consolidation now, this will lead to eliminating some more people in the industry. So this is not good for the industry," he said.

He, however, felt that the demand for homes may pick up by the end of the April-June quarter and said that as several other asset classes such as stock markets, mutual funds and bonds are subdued and volatile now, investors are likely to turn towards real estate.

"Lot of people will come back into housing, as it is a safe investment. Housing is one area there is lot of interest, with fall in stock market, gold, bond, overseas investment, lot of people will develop discomfort in investing in all those assets, so there is big money likely to come into housing, and I expect demand to come back into housing in a reasonably good way, by the end of first quarter." On the reliefs needed by the sector, the Shriram Properties chief said that along with GST and stamp duty reduction, external commercial borrowing (ECB) for the sector should be allowed to avail cheaper credit.

He also said that Input Tax Credit (ITC) should be reinstated on GST, which will be a major relief for the developers.

On home loans, he said that "home loan tenures can be extended and rate of interest can be further reduced to as low as 6 per cent". Currently home loans are available mostly at over 8 per cent interest.

He also stressed on the need for incentives for the second home buyers. "Because of low returns in mutual fund and gold and such others, lot of second home investment can come into housing," Murali added.

Speaking on the issues faced by the construction workers during the nation-wide lockdown, he said that it is the responsibility of the developers to ensure the food and essential supplies to their respective construction workers in and around the project site.

He also said that during the total halt on constructions, the company provided food and the essential products to all the construction workers in and around its sites.

"We need to bear the responsibility, it's not just the government. We have close to about 5,000 people across all our sites, we have made all the necessary arrangements to give them the right protection, making sure that they are properly taken care of, all that is being done, across all out sites, apart from the food and all other needs, we are taking care of their entire needs." On the partial resumption of construction activities in the country starting Monday, April 20, he said that it is a welcome move and would help in solving the problems faced by the migrant blue collar workforce to certain extent.

"We expect the government to ease the restrictions for urban areas as well, in the coming days," he said.

(Rituraj Baruah can be contacted at

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