New Delhi: Pressure seems to be mounting on real estate companies for a downward revision of selling prices of their projects. Two industry bodies, the Confederation of Real Estate Developers Association of India (CREDAI) and the National Real Estate Development Council (NREDC) have asked their members to cut rates on housing projects by up to 15 per cent to revive sales.

The development comes even as real estate companies like DLF, Parsvnath and Emaar MGF are seeking tax concessions from the government.

Companies like Ansal API, Omaxe, Assotech and DLF have already agreed to cut prices. Bangalore-based Sobha Developers has also promised to evaluate slashing rates, NREDCO President Rohtas Goel said.

The Council has asked members to cut sales price by 1-5 per cent for existing projects, 5-10 per cent on future projects and 10-15 per cent on affordable housing ranging between Rs20 lakh.

The Confederation of Real Estate Developers Association of India (CREDAI) has asked its members to revise prices downwards, though not many of its members seem inclined to do so. 

Mmedia reports quoted DLF chairman KP Singh as demanding a rollback of taxes imposed on the real estate sector by the government, while being non-committal on price cuts, saying that prices are a function of demand and supply. 

Reports suggested that most industry players are optimistic that the Reserve Bank will cut interest rates that will stimulate borrowing and in turn bring home buyers back to the market, while others say it is not entirely possible to slash prices. They quoted Emaar MGF, a Delhi based developer, as saying that lower interest rates and positive economic sentiment were the answer to revive residential real estate. He also cited Emaar MGF managing director Shravan Gupta as saying that micro-markets across India have already seen a correction of 20 to 25 per cent.

Other developers reckon that prices are unlikely to come down, though builders will shift focus to small-size homes to bring down overall cost, even as the per square feet rate will not come down.

Reports also point to a lack of consensus amongst builders in the industry, with some saying that the residential market has seen a correction of around 25 per cent in several micro-markets across India, while other say prices have largely remained stable. Still others think that prices have hit 'rock-bottom' by correcting by around 40-50 per cent.

Meanwhile, industry analysts expect Indian property prices to fall by a quarter in the coming year as the global economic crisis saps confidence of the cash-strapped homebuyer.

Property prices in India has already peaked and a trough has been in the waiting, they point out. Land prices are already down about 15 per cent from a mid-2007 peak, although forced sales have been rare.

Real estate companies are sitting on a highcost stock and a cut in prices will end up in huge losses to mane real estate firms.